Private
lending is the practice of borrowing money by a real estate investor to
be used to purchase rental real estate directly from private lenders
rather than a bank or other commercial lender. Private lenders
tend to be ordinary people such as doctors, lawyers, accountants,
business owners and possible retired people. Most private lenders
are simply looking for better investment returns than they can
typically get from bank CD’s, money markets or even bond
investments. Over the past couple years these type investments
have yielded a paltry 3% to 6% pretax rates. After taxes and
inflation these investments have, in some cases, produced negative
returns for their investors. This is why people are looking for
better returns and private lending is the answer.
Private lenders are looking for returns in the 9% and 15% range and
secured by local rental real estate. This kind of return will
provide investors with positive investment return of almost 300% over
CD’s and money markets. The result is a perfect match of
private lenders looking for better returns on their money and secured
by real estate and real estate investors looking for cash to fund deals
and the ability to pay higher returns.
How to Find Private Lenders
As a real estate investor looking for private lenders, realize that
private lending opportunities will not always come to you. You
may need to go out and find them. The best way to find private
lenders is through networking and low key marketing. Ask people
you know directly or friends of friends about the amount of money they
are currently making with their investments and would they like to
learn how to increase that yield by 300%.
Let people know you are a real estate investor who is paying private
lenders 9% to 15% or more and secured by local rental real
estate. Those who are interested in learning more will ask
questions and express interest. For those people who express
interest you may want to arrange a private one-on-one meeting or group
meeting with several people to introduce them to your private lending
program.
Advertising for Private Lenders
You can do some types of advertising for private lenders but it is very
important that you use relatively low key advertising and usually in
small local areas. We do not recommend ANY form of internet
advertising. With internet advertising you can not control who
will read your ads and the SEC may deem your advertising as a
solicitation. You do not want this happen and will cause all
kinds of problems.
A much better solution can be flyers in elderly communities or bulletin
boards at local grocery stores. Your advertising should simply
offer to provide information as opposed to offering investments.
Public speeches for elderly groups or financial professionals is an
outstanding way to offer to provide some education and in many cases
will lead to people requesting further details about your program and
possible investors down the line. The important point is keep it
low key and local and you will street clear of problems.
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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