Private money lending is all about building relationships—building your network. This involves getting to know professionals in your industry and your discussing your investment with your circle of friends and family that may be looking for an investment. Another option is a hard money loan.
Your net worth is network. If you want to raise private money you have to network. If you are in real estate you need to get to know all the professionals in your industry—this can be everyone from title companies to attorneys. Referrals are key when it comes to private money. Ask your family, your neighbors, your pediatrician. You never know who is looking for an investment.
Make sure that you are prepared. You must be ready to throw your pitch at any moment, in any place, to anyone. You must be well versed on your company overview, your experience, your goals and why an investor should trust you with their money. Creating a video that you can easily share is ideal. Everyone is visual. You can talk about it or you can show it— showing it will win every time.
SELECTING YOUR PRIVATE HARD MONEY LENDER
Finding a private lender is easy—said no one ever. Although, you will be making a pitch to potential investors, remember at the end of the day it is more important that they meet your needs. It is imperative that you ask them questions:
* What is their proposed loan term
* What is their interest rate
* Will they make their loan based on the property’s current value or the ARV
* Fees they will charge
* How quickly will you receive the funds
* What experience do they have
This information will allow you to pick the most ideal lender. It is important to be on the same page as your lender.
Although, private money lenders can be anyone from your best friend to your orthopedic surgeon you can also choose a hard money lender. Why choose a hard money lender?
Depending on your situation, a hard money lender may simplify your life. Hard money is a way to borrow without using a traditional lender or getting into business with family or an acquaintance. This is ideal when a traditional lender won’t approve a loan or when a borrower needs the funds quickly.
Loans require that you show proof you can repay. Traditional lenders will base this on your credit score, your income and your debt to income ratio. The downside of a traditional loan is even with a fantastic FICO score, a large revenue stream and a low debt to income ratio— it may take months for the funds to be released to you.
Hard money lenders use a different approach. Their lending is based on assets; that means the borrower’s collateral secures the loan. This means regardless of your credit or monthly income if push comes to shove they will get their money back by taking your assets and selling them. Yes, that sounds terrifying—however, a good hard money lender will work with you—as long as you find the right lender and build a trusting relationship. It is also possible to refinance a hard money loan into a conventional loan. The hard money loan will get your approval and funds quickly. This gives you time to work on your credit and get your revenue streams in order. Hard money loans typically are from 1 to 5 years.
There are options when it comes to private lending. What is crucial is that you work with an investor that has the same vision as you and one you can trust.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2019 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.