On today’s podcast episode I talk about finding private lenders. To listen to the podcast episode about private lenders, click on the white arrow in the black bar at the bottom of this page.
One of the biggest misconceptions that new real estate investors have is that they think that finding private lenders is difficult. However finding private lenders is not difficult at all. In fact there are literally trillions of dollars sitting in people’s checking accounts, money market accounts and savings accounts. So lack of cash available is not the issue.
The trick is persuading people that have money sitting in their checking accounts or CD’s to lend their money to YOU. Private lenders will need to know you, they will need to like you and they will need to trust you. But they will also need to feel confident that you you have the skills necessary to use their money efficiently and that you know what you are doing, In short, they want to make sure that they are going to get their money back and that they won’t lose any money.
The best way to get them to feel confident in your ability as a real estate investor, is for them to watch you (over time) doing deals and borrowing money from private lenders (or hard money lenders). Once they feel confident in your ability and skill set, they will be much more willing to lend you their money to buy real estate.
So for your first few deals, you may have to use a hard money lender to buy, fix and flip your first few houses. By borrowing from hard money lenders, you will establish a track record that you will be able to show to other private lenders. This will make private lenders feel more confident in your ability to pay them back on the private loan.
To summarize, the lender needs to:
To listen to the podcast episode, click on the white arrow in the black bar at the bottom of this page(please wait a few seconds for the podcast to start)
