How to Supercharge Your Real Estate Investing with Private Funding

Envision this: You've just come across a foreclosure home in wonderful shape valued at $142,000 that is scheduled for acution for $60,000. It's a daydream come true, right? Obviously you have to act FAST to take this deal. That's when reality sinks in: Who in the world $60,000 in hard money just sitting in a money market account.

Now the dream is in a shambles. You can run around begging the banks to give you a mortgage (good luck in this market) or try to extend lines of credit. All these approaches take TIME, which is the ONE thing you don't have.

Next thing you know, the deal is gone, pounced on by another investor who DID have funding in place and at the ready. How can you avoid this scenario in the future? By having the cash accessible to close deals quick. That's how a real estate heavyweight works, and a way to do that is by lining up and using private lenders!

So what are private lenders? They are normal people. Some have full time jobs, some are retired people. Some have large amounts of cash to invest available and some may have a little set aside. Irrespective of their background, all private lenders are searching for a good return on investment for their cash resources.

So, why would they be prepared to loan hard earned cash to real estate investors? The reason is simple: their investments are secured by both a note and hazard insurance policy and, if something happened and you couldn't repay the loan, they have the value of the property to reclaim their money. They're in a very secure position!

So how do private lenders benefit you the real estate investor? In many ways.

For example, the two excellent advantages you must have in the real estate investment business are available cash and speed. With private funding, you will already have your root of cash in place and available. That way when a fantastic opportunity is found, you won't have to scramble in a panic to find the money to do it, as you will already have immediate funds useable to take action with.

You can also get great deals on houses. Everybody knows that "money talks". Showing a seller that you have the ablity to pay cash up front means you get better deals on properties, particularly with foreclosures and short sales. Not only can you act faster than the investor that is applying for a bank loan, you can get a bigger discount on it and pay less than they would!

The bottom line is that there are numerous other rewards to using private lenders too, and today's real estate investor should never ignore setting up a group of private funding he or she can draw on. You would be wise to seek them out and create a good business relationship with them. Doing this can truly help you change from just another real estate investor into a real estate heavyweight!

This article is based a chapter of book Be a Real Estate Heavyweight, entitled The Key to Freedom and Profit in Real Estate written by Alan Cowgill. For more information on the book, be sure to check out www.RealEstateHeavyweight.com.
This article is based a chapter of book Be a Real Estate Heavyweight, entitled The Key to Freedom and Profit in Real Estate written by Alan Cowgill. For more information on the book, be sure to check out www.RealEstateHeavyweight.com.