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Finding a private money
lender is an essential part of any real estate investor’s
business. In the old days (pre 2006) you could easily get a
mortgage or even hard money loan simply by showing up in the lenders
office and filling out an application. If you could walk and
talk you qualified for a loan.
But today in the post credit-bubble market those days are
over. Getting money for your real estate investing business
is much more difficult and likely to get even more difficult as the
credit markets sort things out. So how do you get money for
your real estate investment business?
The answer is a
private money lender.
One of the keys to finding a good private money lender is determining
if they have similar goals and objectives as yours. You need
to understand what they are trying to achieve and if your private
lending program fits their needs. For example, if the private
money lender wants an investment for a 10 year period, but you plan on
doing quick flips every 6 months, it will not be a good long-term
relationship. You and your private money lender need to have
similar goals for a good long-term relationship that will result in
repeat business.
So how do you determine if you and the potential private money lender
have similar goals. You need to discuss your plan and ask
questions similar to a job interview. We would recommend a
series of questions similar to those listed below. Obviously,
you can modified these questions to fit your personality, but the
information you get will go a long way in determining if this is a
person you want to do business with.
Important Questions
to Ask
• How much do you have in liquid
funds?
• Do you have other monies you
might want to consider for an investment program that pays 9% to 15%
and secured by local real estate?
• What type of investments are
you in right now?
• How much are they making on
your current investments?
• How long do you want your
money invested for and do you have plans coming up that will require
your principal back?
• How available is your money or
is it tied up in investments that are not readily accessible?
• Are you a “Qualified
Investor” (person must either have a net worth of about a
million dollars or have an annual income in excess of $200,000)
• Do you know anything about
real estate investing?
• When would like to start
investing?
Asking these questions will flush out how close your goals are and will
foster a good long-term relationship.
Download
your FREE eBook titled "Discover the
Secrets of How to Fund Your Real Estate Deals with Private Lenders" and
learn how to fund your real estate deals with Private Lenders!
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