Private Lending for Beginners
Even if you’re just starting out in real estate investing, building a group of private lenders and other funding sources for your real estate deals is absolutely critical to your success.
Oh, yeah, I know all about getting “free” houses from owners that will give up their house “subject-to” the current mortgages or are willing to owner finance the sale. However, beware because acquiring these properties is usually Not Cost Free!
There are holding costs (the mortgage, utilities, maintenance, etc.) until you get tenant or a buyer. There may be some repairs, back payments, etc. that you’ll need to deal with. In any case - promise yourself that the money is not going to come out of your pocket!
So, it’s time to start building your property funding program. There are 10 basic ways to do this. I’m only going to talk about one (the rest you can get in my”Show Me the Money” training manual at www.privatelendingguide.com).
Let’s talk about one important way: Private Lenders. These are individuals with IRA money or significant investment capital who are willing to lend you thousands of dollars for a great rate of return and some assurance they’re going to be paid back.
The easiest place to start is with your own family and your friends. Next post, I’ll talk about how even beginners can raise hundreds of thousands in capital!
Richard Odessey has been investing in Real Estate since 1999 and have bought, managed and sold over $5MM in assets over that time period. He has created a national network of RE investors that are a source of continual on-the-ground intelligence. Richard has also developed unique and proprietary tools to zero in on only high profit-low risk transactions.
I’ve done both my own money and other people’s money. With my money I’m in control. With other’s, well, they want to vote or something on how my deals work. The most fun for me is paying a higher rate of return than they expect. That is when they tell their friends about what a great guy I am. I don’t need the praise, but I’m delighted to grow my business and my maillists by doing good for others.
Jon,
You make some great points. Exceeding expectations even in a little way really impresses people. Winners make this a lifetime habit.
With other people’s money you can also be in control. You just need to make it clear up front that they have no say over the real estate decisions. Again, it’s managing expectations.
I am just getting started, (haven’t done my first deal YET,) I have been in the home and remodeling business for over 20 years, I have been studying creative real estate purchases for about 8 years, I am trying to overcome my fear of success…