How Private Money Drives Successful Real Estate Investing

In order to drive your real estate investing business to the next level of success, it is necessary to do most if not all, good deals that come your way.

This is made possible by having a ready supply of cash you can use whenever you need it.

This article looks at why you need private money to finance your real estate investing deals as opposed to other types of financing.

In the current downward real estate market, most lenders have tightened their lending underwriting requirements. Currently, you need a good credit and verifiable income to qualify for a mortgage.

If you are self employed, such as real estate investors, chances are you cannot qualify for traditional financing by getting a mortgage to do your deals.

For those who can qualify for a mortgage, you can only do a few deals financed through banks. As a real estate investor, you must be able to do any type of deals without limitations to succeed in the business.

And even if you can qualify for a mortgage, there are lots of deals you cannot do if they do not meet the lender?s requirements.

Nowadays, a lot of hard money lenders have also tightened their lending requirements, with some having some credit score requirements to lend money.

This means that your real estate investing business is limited by financing more than ever before.

Private money solves this problem because it removes most of the hassles imposed by other means of financing real estate investing deals.

Once you have located a good source of private money, the sky is the limit.

First, you are the one who determines which deals to do and which ones not to do. If the numbers make sense to you, then the deal is as good as done. If you like it, chances are that you can have it funded by your private money lenders.

For example, you can do deals that involve buying properties subject to the existing mortgage, such as lease to own or rent to own. Such deals cannot be financed through a traditional mortgage or hard money lenders.

This means that deals that are out of reach to other real estate investors are within your reach.

Secondly, some deals require speed to make them happen. If you already have private money investors lined up, you can have your deals funded within a few days. A house going through foreclosure may be out of reach when you have to go through hoops to get financing. With private money, you can close any deal with the speed required to make it happen.

Thirdly, private money is cheap. Even though private money investors get a higher return on their investment than traditional lending, the cost of getting private money is still less than hard money, or seeking a partner.

To sum it up, with private money, you have a cheap source of ready cash available to finance most, if not all, of your estate investing deals at a short notice.

Source: http://feusab.com/?p=86065

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