Private Money For Buying Houses
Many of you are investing real estate with OPM (Other People’s Money) and getting some good results. You find a house for sale and get a hard money lender to put up some or all the funds, you rehab the house and sell it. This is good for investors who Flip houses, but what if you want to buy and hold the house for yourself or as a rental. Will your lender go more than a year or two? Where are you going to find your funds? Are those funds that you are getting putting you on a time crunch?
Many people don’t realize there is money everywhere. It’s just a matter of getting the “Key master” to let you in on the resources you need. What do I mean? Private money. Many professionals have money they have earned over the years from their profession, but they don’t know where to invest it or don’t want to deal with the headache of real estate investing. These professionals are willing to lend their money to a trust worthy person they have confidence in that will do what they say and make them more money in real estate without them having to do the labor. Many people are interested in real estate, but don’t want to swing a hammer or fix toilets. If they can make money like they do in the stock market, meaning from their desk, and have the security of a tangible property to secure their money, many people will be happy to partner up with you.
Next comes the reason that real estate investing is a people business. Talk to the people you think have money. People who buy houses should know how to talk to people, so this should be the easy part. Buy your professional lunch, talk to them and explain your proposal. DON’T HIDE FACTS. A transparent relationship from the start is the best way to go. Real estate investors know there is a chance of losing money and your lender should too. This may scare you lender away for now, but they are just saying no to the current offer. If you can make them feel comfortable that they will get their principle back with more security (an additional house you already have as collateral or less money in the current deal), you will get a yes.
Most Lenders want to see the house you are trying to buy and deals you have already done in the past. Show them the houses you have bought and sold and the numbers behind them. Show them how much you need and why, when they will get paid back and how they will get their money back even if the project goes “south”. If you’re asking for long term financing, make sure they understand how long the money will be tied up and how the money will be paid back (Amortization schedule or interest only until you refinance). Match the house purchase to the lender. A lender looking for cash flow will want monthly payments from a buy and hold. An Estate builder will want flips for short term gains. Make the lender happy and they will do business with you again later.
Property Conveyors has money to lend on occasion and is happy to talk to investors with a track record of buying and selling houses in Macon, Warner Robins and Hawkinsville areas. Give us a call or opt in.