To be successful as a real estate investor, you must have access to private money. Private money is the only source of funds that you, the aspiring real estate investor, can use where you set the terms and not your lender.

The importance of this fact cannot be overstated.

If you’ve been a real estate investor using private money for any period of time, or if you’ve struggled trying to get banks or hard money lenders to fund your deals you know exactly what I mean.

When you make the rules and help your private money lenders be successful, you are creating a win-win relationship that helps your business profit and your private money lenders increase returns and reduce risk.

Think about that for a minute.

If you go to a bank, a traditional source of real estate loans, you play by their rules. They set the fees, they set the terms, they set the interest rate.

And, they make you jump through hoop after hoop just to get the money.

It can be a painful process.

And frankly, not something that I would recommend you even try.

You’ll Pay Big For Hard Money

The reason most real estate investors rely on bank loans is simple. It is a lack of education.

Let’s explore the various funding options you can use in your real estate investing business.

Traditional loans are the cheapest, have the longest repayment terms but are the most difficult loans for a real estate investor to get.

Banks with real estate investors loans based on income and credit. That might be a problem if you are just starting out, are starting over or have too many loans already. The banks make the rules, not you.

I don’t recommend using bank loans to build your real estate investing business.

Hard money lenders are more expensive than traditional loans but still harder to get than private money. Hard money lenders usually charge several thousand dollars just to fund your deal and then they may charge up to 18 percent interest which you have to pay monthly.

The benefit to hard money lenders over traditional banks is that they are interested in the property than they are in your income or credit. It is becoming more and more common that even hard money lenders want to be very selective with the real estate investors they work with.

This is making it harder and harder to get hard money loans. And, hard money lenders require that you have the money to fix up the property.

The bottom line, you need cash to work with a hard money lender. And, the hard money lender makes the rules not you.

You will see why private money is so much more beneficial.

Get Private Money And Get Paid

Private money lenders and private money are exactly what real estate investors need.

Private money is usually more expensive than traditional loans but cheaper than hard money loans. Private money typically costs you nothing up front and the private money lender will fund your entire purchase plus the cost of construction.

Private money is money you borrow from people that are not in the lending business daily but want to earn a higher interest rate secured against real estate than what they can get from their IRS accounts, money market accounts and CD’s.

When you use private money, you make the rules. That means that if you listen to what your lenders want you will always have the private money to close.

Private money helps you eliminate negative cash flow, requires no cash or credit to get the loan and pays you up-front to close on your deals putting thousands of dollars in your pocket right away.

The benefits of private money are endless and every real estate investor must learn how to find and get private money. You must start today.

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