The hard money lending industry is an amazing opportunity to make money as a private bank. In the result of the downturn, investors in real estate basically prefer hard money loans over standard lending establishments. Most investors in property are sometimes purchasing distressed bank owned properties for the purposes of flipping or rehabbing.
Sadly, current lending policies passed by banks have made it unlikely for anyone without spotless credit and gigantic asset reserves to obtain financing to get properties to rehab. In reality even with pristine credit and good money reserves the basic fact the subject property should be rehabbed or has any functional deficiencies can kill the deal since the property cannot qualify for standard financing.
Many times the former owner may have had a forced resale party on the way out and destroyed or took everything in sight prior to eviction. This is the most common reason financiers require access to private money.
Investing in property as a money lenders is the ultimate everybody wins scenario for you, the investor and the community as full. By providing real estate investors with quick no-hassle financing you're able to charge a steeper rate, usually in the 15% range and earn an extra 3% to 5% by charging points on the loan.
Since these loans are short term and generally repaid within 6 to 9 months; the quick return of capital will allow you to lend the money continuously. So creating yields higher than 25% a year.
In this business you not only have command over your investment dollars but you have the ability to structure deals that leverage the time and experience of your borrower.
The normal property financier has to do lots of footwork finding and vetting the deals, but as a private money investor you have got other speculators going out finding the properties and bringing you the deals. Furthermore it will only take a brief time before your client base knows your investment style well enough to only bring you the deals they know you can have an interest in.
Even in business depressions the business is there. Thanks to all the foreclosures and short sales there are more than enough properties available for dimes on the buck.
Banks need to get these REO's off their books and smart backers need to flip them. As a non-public bank you'll be prepared to get these investors the money required fast and put a 15% to 20% profit in your pocket and theirs each time.
Sadly, current lending policies passed by banks have made it unlikely for anyone without spotless credit and gigantic asset reserves to obtain financing to get properties to rehab. In reality even with pristine credit and good money reserves the basic fact the subject property should be rehabbed or has any functional deficiencies can kill the deal since the property cannot qualify for standard financing.
Many times the former owner may have had a forced resale party on the way out and destroyed or took everything in sight prior to eviction. This is the most common reason financiers require access to private money.
Investing in property as a money lenders is the ultimate everybody wins scenario for you, the investor and the community as full. By providing real estate investors with quick no-hassle financing you're able to charge a steeper rate, usually in the 15% range and earn an extra 3% to 5% by charging points on the loan.
Since these loans are short term and generally repaid within 6 to 9 months; the quick return of capital will allow you to lend the money continuously. So creating yields higher than 25% a year.
In this business you not only have command over your investment dollars but you have the ability to structure deals that leverage the time and experience of your borrower.
The normal property financier has to do lots of footwork finding and vetting the deals, but as a private money investor you have got other speculators going out finding the properties and bringing you the deals. Furthermore it will only take a brief time before your client base knows your investment style well enough to only bring you the deals they know you can have an interest in.
Even in business depressions the business is there. Thanks to all the foreclosures and short sales there are more than enough properties available for dimes on the buck.
Banks need to get these REO's off their books and smart backers need to flip them. As a non-public bank you'll be prepared to get these investors the money required fast and put a 15% to 20% profit in your pocket and theirs each time.
About the Author:
Tim Tavender is an author with ten years experience running his own personal loan singapore . He has written for State Papers and Mags about loan .
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