Find All the Private Lenders You Need to Fund Your Deals

By Kathy Kennebrook (The Marketing Magic Lady)

One of the most important resources any real estate investor needs in their business is the cash to fund their deals. But where is this cash going to come from? Where are you going to find a source for unlimited cash so you can fund your deals, therefore allowing you to purchase all the properties you want? Once you implement a solid marketing plan and you have motivated sellers and deals coming into your pipeline, then funding your deals becomes the next big step in your business plan.

You certainly don’t want to go to a bank for it. You will have to fill out a lot of paperwork and wait weeks to find out if you’re approved. The biggest problem with this method is that while you are waiting to be approved, someone else who can close more quickly using private funds will get the deal you were looking at and make all the profits from it. So where should you get the money to fund your deals?

The answer to this question is simple; private lenders. So what is a private lender and how are you going to find these folks to fund your deals? Private lenders are ordinary people, they are all around you. You just have to find them. A private lender is anyone who will loan you money to fund your deals. There is no credit check involved and generally no fees. Their investment is guaranteed by a mortgage on the property you are purchasing plus the insurance on the property. Generally the loan to value on these mortgages is about 65-70%. Therefore, you can obtain the money to fund your deals no matter what your personal financial situation might be. If you are working with truly motivated sellers, it should be fairly easy for you find deals that fit these parameters.

It is fairly easy to find private lenders. The first thing you need to do is to look around you. Do you have relatives, friends or professionals that you know who have money lying around in CDs or money markets or 401K’s that are not getting a good interest rate, or maybe you know someone who just inherited some money and they need to invest it. Since you are going to pay them anywhere from six to ten percent interest on their money, they will be very interested in talking to you about loaning you the money you need. And once again, their investment is guaranteed by a mortgage on the property and by the insurance you keep on the property. So even if you defaulted on the loan, their investment would still be protected by the value of the property, so it’s a win-win for you and your lenders. Where else can they get a great rate of return on an investment that one would say is pretty conservative risk wise?

And remember, for you, it’s not the cost of the money that is important; it is the availability of money that is important. Without the influx of ready cash into your business for purchasing new properties and getting rehab completed, you will be unable to take your business to the next level.

A lot of people who would be interested in becoming private lenders and earning a higher interest rate on their hard earned money don’t even know the opportunity exists until you tell them about it. Other ways to locate private lenders would be through your local real estate clubs, Realtors, or mortgage brokers. These folks usually work with or know of private lenders who are looking to fund deals. At your local real estate club, there are probably lenders there just waiting to loan you money for your deals. These are the folks who are savvy enough to know where to find investors who need money to fund deals. Very often Realtors work with investors who have money to lend and will match them with a client who is an investor, who is trying to purchase a really great deal. This is a win-win for everyone involved. You also need to tell everyone you know or meet what you do for a living and that you use private lenders to fund your deals. You just don’t know who has money available to lend to you. I actually got a new private lender for my business while having my nails done at a local nail salon so don’t be afraid to talk about what you do and how you can help folks get a better interest rate on their money.

There are many advantages to using private lenders in your business. The main advantage is the ability to be in total control of your deals. Your money will be available to you almost immediately and at the terms you agree on with your lender. There is no pre-payment penalty, no points like on a regular mortgage, no down-payment, and reduced closing costs. The money is available to you when you need it, and most lenders will let you make part or all of the interest payments at the end of the loan. This increases your cash flow on a monthly basis. In addition, they will supply you with the funds needed for repairs on the property. So the flexibility you gain when using private lenders as opposed to banks when doing deals is extremely advantageous to your business.

What this does for you is to greatly increase the number of deals you can do, the types of deals you can do, and gives you the ability to close very quickly. In the real estate business time is of the essence. Just the ability to close quickly can make or break a deal for you. The ability to close quickly will give you a huge advantage over most of your competitors.

Plus, if you have the ability to pay cash and close quickly, many times you will be able to negotiate a much better deal on a property you want to purchase. With private lenders in line, you are always equipped with all the funds you need to grab each opportunity as it arises. The sense of confidence this will give you in doing your business is nothing less than amazing.

Also remember when you are working with private lenders to have them write a reference letter for you to include in your credibility kit. This is an extremely powerful addition to this kit that you will be using in your business.

Discovering this key ingredient in your real estate business will allow you to do more deals and make more money than you ever imagined. For more information on funding deals using private money, visit my website at www.marketingmagiclady.com. While you are there be sure and sign up for my FREE Monthly Newsletter filled with all kinds of great tips for your real estate investing business.

Kathy Kennebrook

Kathy Kennebrook is the ultimate success story. She spent over 20 years in the banking industry before discovering the world of real estate. After attending some real estate seminars this 4 foot 11 mother of two got really excited and before you know it she’d bought and sold hundreds of properties using none of her own money or credit.

Kathy holds a degree in finance and has co-authored the books- The Venus Approach to Real Estate Investing, Walking With the Wise Real Estate Investor, and Walking With the Wise Entrepreneur which also includes real estate experts Suze Orman, Robert Kiyosaki, and Dr. Wayne Dyer.

She is the nation’s leading expert at finding highly qualified, motivated sellers, buyers and lenders using many types of direct mail marketing. She is known throughout the United States and Canada as the Marketing Magic Lady. She has put together a simple step-by-step system that anyone can follow to duplicate her success.

Kathy has been speaking throughout the country and across Canada for over 14 years and has shared the stage with Ron LeGrand, Dr. Phil, Dan Kennedy, Mark Victor Hansen, Ted Thomas and Suze Orman to name a few.

Kathy is going to share with you how she generates a seven figure income by mailing a handful of letters throughout the year to highly selected targets by knowing exactly what to send them, who to send them to and exactly how to deliver her message. She will teach you the secrets of pre-screening and automating your marketing and follow up systems to put your entire Real Estate business on auto-pilot.