fbpx

Private lender real estate: give your business a boost

In fact there are many parties involved within the real estate market, including the private lender. But after all, do you have any idea what they are and how they can help to give a boost to your real estate developments? 

Well, I know how to help you.

First of all, I need to clarify that there are two types of people within the real estate market.

The first one is the person who seeks a property for personal use, that is, she wants a house to live with her family or she knows how to give a gift to a loved one.

In this specific case, the financing approach often ends up being to mortgage the property in order to buy it and enjoy the benefits of the new housing. 

On the other hand, the other type of person within the real estate market is an investor profile. This one has a different look from the personal buyer. After all, what the investor is really looking for is to find the most profitable business opportunities possible. 

And it is for these last two groups that I am writing this article, since private lending is an excellent way to make or renew agreements quickly and practically. 

Let’s go straight to the content!

Who is a Private lender real estate market? 

Private lender real estate

Well, the answer can be a little complicated, because it is easier to say who is not the private lender within the real estate market.

In this context, this type of creditor has no connection with banks. They are people or companies that use credit as a form of investment.

As expected, this way of obtaining loans has quite significant gains in relation to the credits granted by banks.

Therefore, many investors aware of this potential have generated great benefits with the private lender. After all, there is no bad business, there is bad business for the wrong person.

If you want to find out if a private lender within the real estate market is a good deal for you, take a look at the next topic.

Wait and see.

The two main courses of action of private lender in real estate

As I said before, there is no bad business if you know what it is for. That is exactly what I will approach here in this paragraph, since the private lender can act in two main ways within the real estate market. Come with me!

Making the refinancing of your property

Remember in the introduction that I talked about the two types of profiles within the real estate market?

So, this form of private money lenders’ performance can be especially interesting if you have bought a property through mortgage financing.

Let’s suppose you made this kind of loan with a certain bank and now you want to renegotiate your debt reducing the value of the installments and narrowing the time of payment, all in order to get a lower interest rate.

But it happens that negotiating directly with the bank this interest amortization many times will not be so successful than if you pay a part of the debt at once and negotiate the rest.

Therefore, you can consider private money lenders in these cases to get money dynamically in order to settle a part of your debt with the bank and thus negotiate much better interest rates than before.

Buying a new property

We all know that the real estate market game is often based on who arrives faster. As unfair as this may sound, we have to dance to the real market ‘s tune.

Therefore, if you are an investor of this market, you should seek to have as many private lenders as possible. Because in fact you do not know when a bargain will knock on your door. And you need to have money in hand to realize this negotiation as soon as possible.

Remember that many people need money immediately, so being a cash buyer within the real estate market can be a watershed for your career.

So whether you are a flipper, a wholesaler or even a realtor, it is important that you keep a good number of trusted private lenders on your contact list.

But, the doubt you may be having is how to have these contacts in your schedule. I’ll show you step by step right now.

Main differences in hard money lender and private money lender in real estate

Unlike getting a loan with hard money lenders, the private loans we are dealing with here are somewhat more difficult to get. After all, the interest related to hard lending is much higher than the private mode.

In this context, although many treat hard and private as the same thing, there are some differences between them.

Among them are the way of doing business, that is, while hard lenders use real estate as collateral, private lenders must be convinced that their investment is worth the risk, so to speak.

Another difference is about independence.

Thus, although hard lenders do not follow strict policies and can lend money with a certain flexibility, some of them have links with large financial institutions.

This differs them from private lenders who, as we saw at the beginning, have no connection with banks or similar organizations.

Therefore, each type of creditor serves a certain purpose, it is up to the investor to assess which of the opportunities best fits his profile and type of negotiation he has in hand.

How to find a good private lender in real estate

Definitely the answer to this question is not simple at all. That’s why I’m going to explain the main characteristics that you real estate investor should seek to have when it comes to finding a good private lender.

1st – It’s all about networking

You who participate know the real estate market for some time have surely realized that investing in your network is the best thing you can do.

Consequently, seek to connect with the most diverse stakeholders in this market. After doing this diligently and consistently your profile will certainly be recommended to some private lender.

Therefore, do not underestimate any kind of connection, even if it is not directly connected to the real estate market, it may in time establish some relationship.

2nd – Make a careful selection

This point is vital to establish successful private lending relationships within the real estate market.

In this way, make an effort to evaluate the profile of each professional who appears in your contact network. Evaluate the interest rates charged by them, all fees, whether they offer the loan on the value of the property pre or post retirement. Finally, make a complete assessment of the options that arise.

3rd – Prepare an irresistible presentation

In this sense, you must not forget that you must convince the options you have selected from private lenders that investing in your work is safe.

For this, it is of utmost importance that you prepare a presentation demonstrating your main results within the real estate market. Be sure to show the financial results, showing how much you invested and what the return was.

Also, train pitch before it occurs in the most natural and fluid way possible in order to show all your skills, making potential creditors fully trust your work.

But be careful.

If you make a presentation to a friend or family member, you should not give such a formal sense when showing your work. On the contrary, try to bring a more informal look, as if it were a conversation in which you talk naturally about your strengths and your results.

How much do private lenders charge to offer the services?

Well, that is quite variable. Just as it is variable to check or not the client’s credit score, the interest values of the private loan can vary a lot.

In this sense, the range is between 4 to 12% depending on the type of your business within the real estate market, your track record, your relationship with the legend.

Finally, there is no ready-made answer to this question.

Conclusion

Finally, I hope this article has been valuable for you to see new opportunities within the real estate market. In fact, the private lender is much more than a creditor, he is an investor who understands the financial market and may be willing to invest in you and your business.

For this to happen it is necessary to prepare well and follow the tips that I passed in the lines above. I have no doubt that if you follow them with patience and hard work, excellent opportunities will arise.

In this sense, always seek to strengthen your contact network, as this is really essential to establish yourself well within the real estate market. After all, many bargains will appear through your contacts. Unfortunately, many times the opportunities are taken by the one who arrives first.

Therefore, we at Br Capital USA want to unite all real estate market stakeholders in the most ethical, noble, fair and responsible way possible, so that this environment is not only a place for business, but also for spreading good values with social conscience.

 

Deixe um comentário

O seu endereço de e-mail não será publicado.

Sign up to learn about the benefits we offer to our customers.
Hello, BR Capital USA Customer
Sign up to learn about the benefits we offer to our customers.
Hello, BR Capital USA Customer
Sign up to see the benefits we offer to our partners.
Hello, BR Capital USA Partner.
Sign up to see the benefits we offer to our partners.
Hello, BR Capital USA Partner.
Sign up to learn about the benefits we offer to our investors.
Hello, BR Capital USA Investor.
Sign up to learn about the benefits we offer to our investors.
Hello, BR Capital USA Investor.