Private Lending for Real Estate Used to be Tougher
Real Estate Investing is Easier With Private Lenders- But Getting Funded Doesn’t Have to be the Chore it Once Was
Private moneylenders can be your key to success in real estate investing; you see, It really doesn’t matter how sharp you are at spotting deals, how well you network, or how fast you can get the deal done- If you don’t have the capital to fund your real estate investments, you are sunk. Period.
Most of those Average Joes starting out in real estate investing – those without heavy capital of their own to make principal investments – find themselves in a Catch-22 position. They have difficulty securing funding for lack of a long-standing track record, but they can’t acquire a track record without the funding to close deals.
So what to do when your personal funds are low, traditional banks won’t bet on you, and you need to secure funds ASAP? The answer is private moneylenders.
Private moneylenders can be individuals, groups, or even companies. They invest the capital necessary for startup businesses, with the expectation of a return. Private moneylending is much more forgiving than traditional lending, as the relationship is generally more personal in nature, and each side has ample opportunity to negotiate terms they find acceptable.
So how to find the right private moneylender? It used to be far more difficult than it is now in today’s digital world, where data systems such as Find Private Lenders Now exist.
The following are a few “old school” ways of getting private moneylenders; you can still follow these methods, but why struggle when you don’t have to?
Start with friends and family
Friends and family are a good place to begin when you are starting out in real estate investment. You are likely to start smaller with your first purchases, so you will not necessarily be searching for very deep pockets. They presumably like you and want to help you succeed. They also know you well enough to vouch for your character, so you won’t have to prove yourself the way you would with a stranger.
If you do ask for loans from friends and family, make sure you choose someone who truly has the capital to invest, and make sure you’ve done your homework, have handled your due diligence, and reduce risk as much as possible. You don’t want to jeopardize relationships, or earn a bad reputation among other potential future investors in your inner circle.
Network
Networking is about using the contacts in your inner circle to expand your reach to their inner circles. It is also about attending conferences and conventions, joining local business groups, and hobnobbing with other people in the real estate industry. Basically, you want to insert yourself anywhere that may land you a potential lending lead.
Advertise
Placing ads in newspapers, magazines and online sources can steer lenders looking for an investment in your direction. Advertising campaigns using flyers and leaflets are useful for getting the word out there, but they can be costly, and they require legwork. Direct mailing campaigns, in which you research and target potential lenders for ad campaigns, is a more effective strategy.
Search for lending institutions
A quick online search will help you find numerous potential lenders. Take care to research any lending institution thoroughly before sealing any deal.
All solid approaches to finding private lenders, you don’t want to disregard any of these, but you also shouldn’t make life harder than it has to be. There are terrific systems available that really take the headache out of the search and smart investors know how to take advantage of them.