Investing in real estate is such a popular career because there is a lot of money that can be made. One of the ways you can get as much money as possible from your investing is by knowing how to secure funding. When you know how to secure funding, you are able to purchase properties without putting up a lot of your own money. This is vital if you want to be a successful investor. If you think about it, the more properties you can buy without using your own money, the more money you stand to make.
In years past, it was really easy to secure funding because all you did was go to your local bank and take out a mortgage loan. The reason that more people are wondering how to secure funding for their real estate transactions these days is because it is so much harder to get a loan from a bank. This is why you need to know how to get funding from other sources, mainly from private lenders. If you never have heard of these, they really are just regular people who are looking for a great return on an investment. They are willing to give you the cash for the property in return for a portion of the profit.
To make the most of a private lender, it is a good idea to have a great business plan drawn up. You will be more likely to receive the funding if you let them know exactly what you plan on doing with the property. In other words, what you are doing with their money. This especially is important for first time buyers who are not sure how to secure funding for real estate. Since you do not have the track record to show the lender, you will need a great plan.
Because you will have to know where to look to find these private lenders, a great tip for people looking into how to secure funding is to join a real estate club. There, you will be surrounded by several people in the real estate business who will have plenty of connections for you. They all have gone through everything regarding funding, so they will be able to give you tips as well. They will know who to avoid and who is great for funding.
This article was wrote by Debbie of The Las Vegas Real Estate Club. For more information on this article or our Real Estate Investing Workshops, where we will teach you how to invest in properties, please visit our website.
http://www.REIClub.com – Attracting Private Money Lenders To Your Real Estate Deals Is Easy If You Have a Professional Credibility Packet to Show Your Private Lender…
To Learn More on Private Money Lenders:
Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I’ve got quick video on using credibility packets to attract private lenders for your real estate investments.
– Quick Bio of Self
– Picture, real estate experience, deals you have done?
– Do not spend a lot of time on yourself, no one really cares
– Property of Interest:
– Property Comps – get them from realtor – MLS – Houses sold in past 90-180 Days
– similar in sq.ft and neighborhood/subdivision
– Highlight – Address, list price, sq.ft., year built, realtor remarks
– Location – Quick description of neighborhood, schools, malls, near highway, etc.
– Include graphs if you want to show market trends
– Pictures of interior – carpet, kitchen, bedrooms, flooring, appliances (hot water heater)
– Pictures of exterior – siding (brick or wood), backyard, fence, roof, external units
– List of repairs – itemize cost
Profit Analysis – What’s in it for the Private Lenders?
Break down the numbers
– List Price = 0K
– After repair value (ARV) = 0K
– Repair Costs = K
– Taxes/Insurance = K
– Closing = K – Unless seller takes closing cost
– Total costs = K (deduct from list price)
– Starting Cash Offer – K
– Return on Investment (ROI)
-offering 3 points at closing = 00
– Include interest rates – in case deal runs long
– emphasize how the ROI is much better than interest from the bank or IRA account.
– Exit strategies
– Title company you will be working with
– Timeline – Project completion date – include repair timeline
– Contact information
– Contract Agreement
Building credibility among your private money lenders is essential to securing continued funding in the future. You have to remember that you will most likely be asking people, with virtually no real estate investment background, to give you large amounts of cash for something they know nothing about. So it is your job as the investor to inform them, and make them feel comfortable enough to trust you with their private money. Credibility kits are cheap in cost but great in value. A binder, some dividers, pictures, you are probably looking at around -10 dollars for a complete package. All the other information you are providing is FREE.
Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you’ll be automatically notified when we upload more quick video tips for you. Take care and good investing.