How many of us have found a great deal but, for various reasons, just could not secure sufficient financing to make it work? Or how many of us have been in a deal where we needed refinancing but could not get it on the terms that we wanted? When that happens, we end up watching that opportunity pass us by – and in some cases there was a solution!

There was a way you could have secured the financing you needed to close that deal.

Private lending is often an overlooked solution to financing problems. is conceptions, myths and mystery surround private lending.
There are a variety of lenders that could be called private lenders, for which the fees and costs of financing vary substantially. The focus of this article is to discuss private individual lenders, not institutions or investment corporations. The private individual lender can be difficult to access and so many borrowers end up with private institutional lending which can be more costly when fees are added in. Some of the benefits to using a private individual lender is that, in many situations, there are more opportunities to customize the mortgage that the borrower needs and, in many deals, fees can be lower than other institutional private sources.

How does private individual lending work?

A mortgage broker who specializes in private financing can help a borrower find an individual who will lend ‘privately’ (i.e., not through a bank or institution but directly on their personal behalf) on a property. An individual lender seeks a better return than bonds and does not want the risk of the stock market; instead, an individual lender wants to make money off of real estate without directly owning it.

A private mortgage is generally short term in nature (typically 12 months), is secured by real property, and the return is the interest that the borrower pays with, possibly, a lender fee.

The lender will make an offer on the mortgage stating the terms that they require to lend the mortgage. There can be a negotiation and private lending offers opportunity to tailor mortgage requirements more so than an institution who only offers certain mortgage products that may or may not be open and may or may not have other requirements. When an agreement is reached, a lawyer or notary will prepare the necessary documents and a charge will be registered against the property just like any other mortgage. Private financing does cost more that conventional financing, and private money is a market like any other which is moved by supply and demand; the price of which fluctuates accordingly.

The following are some of the situations where private financing offers significant benefit:

1. A private lender, may lend more on the basis and merits of the property so if a borrower has less than perfect credit or lack of credit or has a difficult time proving income but the property itself holds good value, the latter can make the deal work for a private lender whereas a conventional lender will decline it.

2. Private borrowing can also work for properties which are held in a trust, even a foreign one. Most banks won’t lend to a trust because they require a personal guarantee.

3. Private lending is also a good solution for temporary needs, such as when a borrower feels that in a short time their credit may be good enough to get conventional financing or if they are waiting for another deal to close in order to release funds to use for the new deal. This works well with private money because most private mortgages are for relatively short terms, 12 months or 24 months.

4. Private mortgages can even be negotiated to be ‘prepaid’ mortgages, such as when the borrower doesn’t want to make monthly payments; this way the borrower simply pays the whole amount (including the capitalized interest amount) back at the end of the term. This especially makes sense for someone who is selling their property and knows they will have the funds to payout the mortgage within a year.

5. Private lending is also a potential solution if the location of your property is outside of where a conventional lender is willing to lend.

A private lender has the same rights as a bank when it comes to being paid. If the mortgagor is behind on payments the private lender has the right to pursue foreclosure just like a bank would in accordance with provincial or state laws. As well, if payments are late, it is typical for a charge to be added which would be defined in the mortgage agreement. Some private mortgages may require the borrower to have life insurance but it is not necessarily a standard clause. What is important to remember is that for the extra cost of financing the borrower has the opportunity to negotiate what terms are important to them to make the deal work and a private mortgage broker can help with this as a mediator between the borrower and the private lender.

Private lending might be the right solution for you, but it’s worth nothing that it is not a solution to buy property with no money down. Realistically, in the current market, most private lenders will not lend above 80% of the property value, so you need to have at least 20% equity (and commercial properties need even more). Private mortgages can be in first or second position, and possibly a third depending on the amount of equity. They can be used for residential, commercial and even in construction financing.

I invite you to learn more about Private Lending and get my ebook titled Private Lending Secrets for Real Estate Investors! by Clicking Here Now!

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lending Presentation Kit

Popularity: 50% [?]

I was scrolling through Twitter posts the other day and one of the people I follow had posted this joke:

A man walks into the bank and says to the bank manager “I’d like to talk to you about a loan”. The bank manager says “Great! How much can you lend us?”

I laughed because Dave and I had gone into the bank earlier in the week to make some large cash withdrawals. We owed my brothers a bit of money for their help with our rental property renovation in June, and we had to juggle money around to a few different accounts for property taxes and other upcoming bills. When we started giving the bank teller the sums of money we were going to withdraw, she started to panic saying that we should have called the bank ahead of time to let them know that we were going to be taking out more than a few thousand dollars in cash.

“But – you’re the bank! If you don’t have money, who does?” I was thinking.

Of course we smiled and apologized and eventually they were able to round up enough cash to meet our requests.

We had to laugh though – if you can’t go to the bank to get money where can you go?!

Of course, you might feel the same way when it comes to finding money for your real estate deals! The lenders have added so many restrictions that people all over North America are finding it darn near impossible to find financing for rental properties. In Canada, in particular, the regulations have changed so much in the past few months that people with multiple properties (like us!) are faced with a mountain of paperwork and a whole lot more trouble than ever before.

But, as we’ve said over and over, we don’t focus on the obstacles we’re facing. Instead, we place our attention on the ways we can get around those obstacles. One way to get money for your deals is to turn to a private lender.

I invite you to learn more about Private Lending and get my ebook titled Private Lending Secrets for Real Estate Investors! by Clicking Here Now!

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lending Presentation Kit

Popularity: 12% [?]

Wow, has the real estate market changed in 2009! Real estate investors have been shut out of traditional mortgage money unless you have a 9000 credit score and a 50 year work history without missing one day of work (ok enough of the weak humor but you get the idea). Even hard money loans are HARD to get as they have all gone out business.

But just as the mortgage market is shunning the real estate investor – we are starting to see signs that the real estate marketing is starting to bottom and home prices have even gone up in some markets.

So how do you take advantage of this buying opportunity if you can not get mortgage money from traditional sources?

Private lending is the answer. You can start borrowing money from private lenders to fund your real estate investments. Raising private money allows you to take advantage of the low prices without ever using any of your own cash or personal credit.

There are several significant benefits and advantages of private money lending compared to mortgage money or hard money lending.

First, you can begin buying more houses for “all cash” offers and drive significant discounts from sellers who are highly motivate to get cash versus waiting and hoping another buyer will get a mortgage approval.

Second, very simple paperwork with a typical private lender transaction only requires 3 or 4 documents with less than 20 pages.

Third, you control the terms and conditions under which you will borrow money and the lender will lend. You tell the lenders what rates of interest you will pay, how long the term is and all the other conditions are set by you not a bank or hard money lender.

Finally, you can turn many non-deals with no equity into super profitable deals with substantial equity by paying off existing debt at a discount… using private money.

Six Steps to develop a private money program for real estate investors:

1. Develop your private lending program and the terms and conditions under which you will borrow money and repay your lenders
2. Build your info/credibility kit to establish yourself as real estate investing expert
3. Create a marketing plan with 5 to 10 different marketing techniques to attract potential private lenders
4. Create your group or one-on-one presentation
5. Schedule group or one-on-one meetings and follow-up with potential lenders
6. Present and close deals with your potential lenders

Given the new market realities, private lending may be the only option if you want to buy and own real estate investments and take advantage of the low prices.

I invite you to learn more about Private Lending and get my new FREE 20-page ebook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by clicking here http://realestatewealthtoday.com/FREE-eBook.html

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lending Presentation Kit

Popularity: 16% [?]

One of my coaching students recent asked me how to raise money for real estate deals since she was having NO luck raising money through hard money lenders. In fact, she had just paid some “guru” $25,000 to take a course and the whole course was about how to raise hard money.

Once she and many of the other students in the Guru’s class start talking they discover that no one was having any luck raising money with money hard lenders. They quickly learn that most hard lender money are out of business. The few that remain have such high lending requirements that the deals made no sense when you have to put up 50% of the proceeds, sign personally, put up cash reserves and pay interests north of 25%.

She was very confused and upset to pay this kind of money to get information that was grossly outdated and useless in today’s world.

I quickly explained that the answer of how to raise money for real estate deals today is to use “private money” not hard money. The difference is with private lending you are dealing directly one-on-one with a private person who may want to invest in your business. You are not dealing with banks or hard money lenders who have no money in today’s post financial crises.

Private lending is a consistent source of money to purchase discount real estate deals that you can go back to again and again and again. The more you use private money lenders, the more money that will become available as you as you develop that relationship.

It is important that real estate investors understand that for the next several years you will need to use and develop a private lending program as other sources of money will dry up and be very difficult to get.

I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by going to http://realestatewealthtoday.com/FREE-eBook.htmlPrivate Lending Secrets

Popularity: 13% [?]

With traditional mortgage and hard money lending getting tighter and tighter for most real estate investors – private lending is fast becoming the only option to finance your deals.

What is private lending and how is it different than traditional lending? Private money is a type of mortgage financing that is usually provided by private people who have extra money that they are willing to lend at higher rates than they could get at banks or CD’s. Their investment is usually secured by the property you are buying and NOT by the borrower. Unlike traditional mortgage lending, the terms and conditions of private lending will vary from person to person and usually depends on the agreement between a you and the private lender.

Borrowing money from private money lenders is much easier compared to traditional banks and hard money lenders. Because you only need to get the approval of one person and you do not need to deal with 4 inches of paper work and a 3 to 4 month approval process only to get reject later. In addition, you will not have to present lengthy documents and other personal credentials such as proof of income in these types of loan transactions. Private lenders first want to know the real estate investment makes economic sense first before they worry about other issues.

Real estate investors with poor credit scores can still borrow money from private lenders if they are prepared and the deal makes sense. However, they must be able to show that their real estate investment makes sense and will generate enough rent to cover their interest payments and the property collateral is worth more than the loan amount. For example, if an investor wants to borrow $125,000 from a private lender, he has to make sure that the collateralize propertys market value will is $175,000 with an appraisal once the repairs are completed.

One reason why many real estate investors prefer private money over business partner is that private money is less expensive. Most private lenders ask for interest rates in the 8% to 15% range while business partners are likely to demand a larger portion of the profits when you sell a property.

The key to getting private money is to be prepared and have a well thought out business plan and credibility kit. Without these two items in place it is hard to image a successful business person giving you money if you do not impress the person with your well thought out business plan. Take your time and be prepared to answer all the questions about the property such as what are the value of comps, what are rents in the area and what are the cost to fix up the property. Also spend some time to develop your credibility kit to show your experience and knowledge as a real estate investor.

I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by going to http://realestatewealthtoday.com/FREE-eBook.html.

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit .

Popularity: 6% [?]

Here is a webinar I did recently with Susan Boggs on how to start a Private Lending Program for your real estate investing Business.

The Real Estate Rich and Famous Series

* Do you know how to cultivate a list of people eager to fund your RE deals?

* Do you know how to put a Credibility Kit, Business Plan and Promissory Note together?

Please click here ===>
http://realrichandfamouse.s3.amazonaws.com/replays/mark/index.html

Popularity: 59% [?]

What do you think your real estate investing business would be like if you had unlimited access to money for profitable deals? Imagine finding a great deal and be able to call up a private lender and outlining the deal and after some discussion the person yes how much money do you need and where can I send the check? Do you think you could get some price discounts from sellers when you knew you could close and close quickly? How would that affect your lifestyle?

This is possible for you if you committee the time and energy to develop a private lender program. It is not a get rich quick plan. You must be organized and have a well developed business plan and marketing plan to meet and develop private lenders and build relationships.

As part of private lending program you must have ways to attract private lenders to call or email you to start the process. Once a potential private lender has contact you must send them some information about your private lending program and then call them and set up a meeting to advance the discussion.

Here are 6 steps to a private lender program.

1) Business Plan: You must have a solid and believable business plan that fits your experience level and skill set. If you have only bought one or two properties you cannot tell a private investor you plan to buy 12 properties this year. This is not believable and the private lender will not lend you money. Your business plan must be well thought out and when you sit in front of a prospective investor it must be believable and achievable without being a stretch.

2) Credibility Kit: Building your personal Credibility Kit is going to be one of the most important tools in your real estate investing business. Nothing speaks louder or more clearly about you or your integrity than letters from your sellers, personal reference letters, letters from your lenders, copies of ads you have run, photos of properties you have bought and sold, testimonials and references, and certifications or professional licenses. The professionalism that a good Credibility Kit presents to private lenders is very powerful and shows you as a real estate investing expert.

3) Marketing Plan: You must have a good Marketing Plan including several different types of lead generating marketing to get potential private lenders to call you and request more information or come to your educational seminars. These methods can include post cards, flyers, networking within professional organizations, and group or one-on-one educational presentations. We do NOT recommend any big or public advertising such as newspapers or internet.

4) Follow-up and Presenting Deals: Once your marketing has generated some leads it is time to present deals. You may want to meet with the potential lenders in a one-on-one meeting and lay out why your real estate deal makes sense and how the investors money is well protected and what return they can expect to earn. You also may want to send out a short summary to a number of potential lenders and see if they are interested by having them call you for more information and details. If one of the lenders calls from your emails it is important to follow up and send both your Credibility Kit and deal summary for their review.

5) Legal Forms and Documents: One of the great advantages of private lending is how simple the forms are for a typical private lending transaction. In fact, most private lending transactions only involve four documents including a Mortgage or Deed of Trust, Promissory Note, Insurance and Disclosure Statement. The most important document is the Promissory Note and this is where you add certain clauses that allow you to control the deal and give you flexibility down the road.

6) Closing: Once you have a private lender ready to go and your forms prepared for the deal, it is time to close. I strongly recommend to my coaching students that they always close with a title clerk or attorney and let them prepare the closing documents and handle the money for you at closing. For the small fee they charge, it takes a lot of headaches away and adds a level of professionalism to your investing business. I also strongly recommend that the title clerk or attorney record the private lenders mortgage with the local county land records office.

I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by going to http://realestatewealthtoday.com/FREE-eBook.html .

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive
your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit.

Popularity: 13% [?]

Private Money

We are all aware that real estate prices are down anywhere from 15% to 40% across the country. In the past, you might have invested $15k to $30k to buy rental property that rented for $1,000 per month and netted the investor 10% to 15% on their investment.

Now you can buy that same property for dramatically less but the rent has remained the same, or even gone up slightly, over the last couple years. So the return to the investor has gone up substantially and 30% to 50% returns on your investment are ordinary today

The hard part right now is being able to get a bank loan. Banks want to see 20% to 40% down from real estate investors AND excellent credit, traditional employment, and personal guarantees. If you do not meet these criteria you are essentially lock out of the traditional mortgage market and will be unable to borrow money from banks. Many of the other non-traditional loans such as no-doc, ALT-A and no money down loans have all disappeared due the financial crisis.

So what is the solution for real estate investors that have been locked out of the traditional mortgage market?
Private Lending is the answer!

Private lending is a consistent source of funds with which to purchase real estate deals and to which you can often go back to again and again and again. In fact, the more you use, the more will become available as you develop relationships with more private lenders.

The reason why private lending is HOT today is so many people are lock out of the traditional mortgage market and private money is their only option to get money for real estate investments.

What is private lending and who are private lenders?

The definition of a private lender is an individual that you can negotiate directly with on a personal one-on-one basis from whom you wish to borrow money for real estate investments. The money can be used to purchase rental real estate investments or to supplement funds borrowed from a bank to cover down payments.

Private lenders come from all walks of life and may not know the first thing about the real estate business. But what they do have is extra cash or assets that they can invest in your real estate deals. These individuals are generally middle class people, who have some extra funds to lend. They can be retired business people, corporate executives, professionals such as doctors, lawyers, or business owners or even blue collar workers.

Private lenders are looking for returns substantially above the 3% to 5% they get at the bank with CDs or money markets. Most private lenders are looking for investment returns in the 9% to 15% range and secured by local rental real estate.

For more information please go to http://www.private-lending-secrets.com/.

Popularity: 11% [?]