No Money Down Real Estate Investing - Fund All Your Deals With Private Lending!

If you invest in real estate, you need money to buy houses. Even if you have a full bank account and an honor to finally close on funds - or short on time, was a loan - for the next deal. Private lending is the answer. It is an inexhaustible reservoir of readily accessible funds: whether it is great credit or poor, whether you have cash reserves or not.

"Private Lending" refers to the process of borrowing real estate by private individuals at rates higher than these lenders can normally achieve in the market. The attraction of private lending is the speed and simplicity of the funds an agreement.

Here is how it works ... First place or not marketing to find prospects in order to earn 10-12% (or whatever you think you affordable and attractive to others) on investments in real estate. You can find these prospects everywhere. You belong to your local investors association, your church, your civic club, your friends and your family, your neighbors next door. You will be surprised how easily you are looking for, and soon they will be on the look out. Let all know that you pay high interest on their loans on your real estate projects.

As prospects express interest explain that the investments are secured by real estate and no more than 75% loan to value (LTV) of the value after the repair of the dwelling. Any investment is to a certain property, and they can be any property with which they are not comfortable. Everything you need is that they approve quickly (within 48 hours), and within 7-10 days or less.

Once they have approved the investment, the funds are wired to the closing attorney, the escrow service. Following the closure of the lender will receive a promissory note loan note from you (either personally from your business, or both), a deed to secure debt (mortgage) on the property, lender title insurance, and as a mortgagee on the hazard insurance.

If no single investor can fund the entire investment, then piece several loans together, by the biggest investor with a first position mortgage, and each smaller investor a progressively subordinate (2nd, 3rd, etc.) mortgage. Normally, we pay an additional percentage on the interest rate to attract investors willing to subordinate positions.

The advantages of private lending are that there is a minimal approval, and thus the availability of funds is fast. You pay only interest, but also incurring a loan origination fee commonly known as "points". You are not by arbitrary rules on how many mortgages you can relax in your name. In fact, none of these mortgages ever show up on your credit report. The private lendor with a higher interest rate with a very safe investment. Everybody wins!

Now you can ask how many people you know really $ 75k - $ 100k - $ 150,000 are only willing to invest. More than you think - and most of them are not aware! This is because the money is bound, in their IRA's, which they believe can not be accessed until retirement. That is only half the truth. You can not personally, the money, without penalties, but they can invest their funds (and you will receive your interest tax-fr ee! If it is a ROTH IRA) if they rollover into a self-directed IRA.

A self-directed IRA is by a third party institution (we recommend Equity Trust Company in Ohio www.trustetc.com) and allows the IRA owner to make decisions in relation to the investments of the Fund. In other words, the IRA owner can decide whether you his IRA funds to a Real Estate Investment in real estate. Most people do not know that as a possibility. They believe their money to remain bound in an IRA until retirement earning nominal interest. Imagine how excited they are, if you have this option! Imagine how much money is currently in the traditional meeting of the IRA that in tap water. There are more funds available than you can use. Is not that a nice problem to have?

Since the Equity Trust Company has all the forms on their website, I make sure that a loan is as easy as possible for my private lenders. I prepare all necessary documents, so that all they have to do is sign and fax to Equity Trust. From this point on, the private lender has nothing else to do. Easy. Easy. Your next task is approving the disbursement, if the loans are paid back. Since the loan is so easy, and the interest rates so low, investors are always begging to invest once again. This really is a bottomless pool of investment cash.

Do not forget that if you cash in an IRA, you can also use the interest you earn through a private lender. They can not all investments in real estate or companies where you or your family have a vested interest, but you can find in the projects of other investors which you know and trust. It is a good way to leap frog your IRA.