The advantage of these private money loans from private money lenders is that the real estate entrepreneur can raise all the capital needed for the acquisition of property without needing to go to a financial institution or worrying about cash, credit score or other qualifying hurtles that institutions always require. Or the real estate entrepreneur can use the private money loan for the down payment in conjunction with institutional financing.
However, in order to convince the private mortgage lender to make a private loan, the real estate entrepreneur must know how to structure the transaction so that if provides the private investor with security, a high financial return, and the lowest risk possible.
This video and the others in this series will explain how to structure a private loan to address the following issues that arise when making private money loans to private investors:
a)How to get loans from multiple investors a give them equal rights in disbursement of interest payments and debt.
b)How to provide a high return on the private money loan without diminishing the cash flow from the property
c)How to secure the property with all investors on the same security deed in a first or second position.
d)How to give private investors a high rate of return even when their funds will only be used for a month.
e)How to treat your private money lenders so that they will be begging you to reinvest their private money.