Tag Archives: private money

Building Passive Income – Hard Money and Private Money

Wendy Sweet joins Larry Goins to talk about hard money, private money and how you can use them to build passive income with your real estate investments.

Wendy explains what you need to look for in a property and in a borrower. Or better yet, how you can invest with a private money lender to earn passive income on other’s real estate deals, all while protecting your investment.

Find out more by watching this video segment from Invest in Yourself.

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What real estate investors can learn from Diana Nyad who just swam from Cuba to Key West

Real Estate SuccessIn case you haven’t heard, Diana Nyad just became the first person to swim from Cuba to Key West without a shark cage. So what can we as real estate investors learn from this? What can we take from someone who may have never even thought about investing in real estate? I think it is important to think about some of the things she said right after she completed her journey. I think if we do this we can see that there are similarities to being successful no matter what you are trying to accomplish. So lets take a look and see exactly what she did say right after she reached the shore in Key West after a 53 hour journey. “I have three messages… One is we should never, ever give up. Two is you never are too old to chase your dreams. Three is it looks like a solitary sport but it takes a team.”

Lets take a look at the first one:
We should never, ever give up! We have all hear it before but guess what, its true! Did you know that Diana attempted to make the same swim five other times and failed. She did this over the previous 35 years. This alone tells us that if you keep trying then you will eventually succeed. I have met many investors or “wanna-be-investors” that have called our office and said that “real estate doesn’t work” after digging a little deeper we find out that maybe they only made 5-10 or maybe 20 offers. Well, the way we buy properties at 50, 40 even 30% of list price we sometimes have to make at least 100 or more offers. So don’t give up on your real estate investing!

The second thing she shared was that you are never too old to chase your dreams! Diana is 62 years old and is the first person to ever make this journey. She will forever be in the history books since she successfully made the swim. This just goes to show that you are never too old to reach your goals. I have met many people as I travel across the USA that tell me “I am too old to start investing”. Well if you don’t start now then when will you start. In my opinion that is only an excuse. And when you don’t want to do something then any excuse is as good as another. Forget about how old you are and start from right where you are right now and do it! Like Nike says Just Do It, but they left out a word and the word is NOW!

The third thing that Diana said when she reached the shore in Key West was “it takes a team”. Even though she is in a solo sport, it took a whole team for her to make it. Real estate is the same way. You need Realtors, Attorneys or Title companies, Contractors, Lenders, Private Money, etc. But don’t get overwhelmed as these things just take time.So no matter what sport, business or opportunity you are trying to succeed at remember these three things. And if my team and I can ever help you to accomplish your goals do not hesitate to reach out to me and my team at 803-831-2858

How to Get All the Private Money You’ll Ever Need

There is a lot of information and even courses, seminars and boot camps out there on private money and I’m sure it’s because private money is one of the few sources where you can generate funds for your deals without having any previous credit, cash, income, job, debt ratio or anything like that. Private funds are very similar to hard money or rehab loans. The only difference is, instead of going through an institution or mortgage banker, you’re actually looking for individuals with money that would like to lend it out at a decent rate of return.

There are many different ways to generate private funds and find the individuals. The first one is your local Real Estate Investors Association. Go and find out who the players are. Frequently individuals, as well as, mortgage brokers and hard money lenders, will be venders of your local REIA group. Many people suggest having seminars and luncheons to find private money. I don’t agree with this, although you can do it. My question is, “Are you looking for houses or are you looking for money?”

The best thing about private money is you don’t have to be concerned with being self employed, your debt ratio, your credit or your experience, because the investor is basically investing their money in the property itself with you standing behind the deal.

Another good thing about private money is once you have 2-3 individuals that are loaning you money and getting a good return, they tend to move in the same circles, so you’re going to have other people contact you about loaning out their money at a good rate of return. That’s really a neat thing, once you get to that point.

To attract private money in the beginning, you’re going to need a credibility kit or some information on who you are, what you’ve accomplished, proof of deals completed, copies of HUD’s, etc. If you haven’t done that, you need to partner with somebody and get some deals under your belt, so you can build your credibility. Most private money lenders will allow you to borrow their money with interest only payments. Some will even allow you to make quarterly payments or annual payments. They’re not generally going to be longer than 12 months because they want to get their money back and turn it. You want to refinance the property quickly and payoff the private so you can turn around and borrow the money again.

You can use a private lender for just a 24 hour period. You’ll do this when you need to close on a property to resell to your buyer the same day. You could offer your private lender around 2% of the loan amount for the use of their funds. This is a good deal for you and your private lender. As an example, if you needed $100,000 to close on the property then you could pay the private lender $2,000 for the use of the money.

There are a lot of different places to find private money lenders. You can look for referrals from people that are in CDs, investment advisor referrals, CPA referrals, attorney referrals, friends, and neighbors, people you go to church with, anybody that may have cash or a portfolio that would like to increase their rate of return.

Once you find out who’s using private money, all you have to do is search the courthouse records and find out who the lenders are on their. Just contact them and see if they’d like to become one of your private lenders. This is the best and quickest way to get private money.