Private Lending Secrets - The Top 3 Reasons Why Private Lending is the Key to Real Estate Investing

When I first starting investing in real estate I made the same mistake everyone else makes and was using my own money. It did not take long before I was out of money and forced to sell a property each and every time I want to buy another property. I needed to find a better way or I was out of the real estate investing business.

I started to utilize private lenders.  A private lender is an individual that you can negotiate directly with on a personal one-on-one basis to borrow money for real estate investments. These lenders would help me fund my down payments, some or even all of the rehab costs and even some of the loan closing costs.  I finally had a way to buy real estate without using much, or even any, of my personal funds.  

What is the importance of private lending?  The answer is using private lenders to fund your real estate deals. Private lending is a consistent source of funds to purchase real estate deals that you can go back to again and again and again. In fact, the more you use, the more will become available as you develop relationships with more private lenders.

Having the ability to fund all of your projects with private lending is critical to a real estate investors success in this business.

There are three great reasons for using private investors to fund your real estate deals and allow you to grow your investment business. 

First, utilizing private lenders will free up your cash to be used for new deals and for making offers versus such things as down payments, rehab costs, and all the costs associated with acquiring a piece of investment real estate. Now you can focus on new deals with your money and use your private lenders to fund the deals you have under contract.

Secondly, private lending is really the only game in town at this time. It very hard, if not impossible for the average real estate investor to get traditional loans from bank or saving and loans with great credit and at least 40% down payment. Hard money lenders are a thing of past as the credit crisis has wipe most of them out. So you are left with private lenders as the only real dependable source of loans to buy investment real estate.

Third, the benefits of private lenders is that the money is relatively cheap at 9% to 15% versus hard money at 25% or more. The documentation and forms are very simple and only require 4 documents to close a private lending deals versus a bank loan with over 4 inches of paper. Lastly, and most important there are no personal guarantees with private lenders like bank money or hard money lenders.

I invite you to learn more about Private Mortgage Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by going to http://realestatewealthtoday.com/FREE-eBook.html .

Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lenders.