When it comes to buying investment properties, are you looking for a private lender? The first thing you need to figure out if you’ve never done this before is how to find a private lender. Buying a conventional mortgage and property as a real estate investor can be a large financial load to take on, and it can help if someone is helping you with that.
It’s not uncommon for investors to look for different forms of financing and figure out how to master the art of finding a private lender that is going to work for them. You will at some point have to look for alternative financing if you want to invest successfully. Read on to find out how to find a private investor so you can hopefully raise some private money and move your investing process along.
Figure Out What Private Money Is
It’s foolish to enter into something when you don’t know what it is. Hard money lending is very different from that of private, so figuring out and knowing the differences can be quite helpful. Essentially private lending is money borrowed from a lender by you the investor and the lender is not associated with a financial institution. Aka you are not going to the bank, this is an individual or multiple individuals who are considering and hopefully agreeing to invest with you.
Hard money lending comes from banks and will have fewer standards but more interest, most likely. Private money can be a boon in this aspect as you split profits but don’t pay higher interest.
Build Up A Network
Having a network allows you to get loans or go into things with people. To that extent, it’s all about building relationships and making a network on investors you know. So get to know professionals in your industry, throw parties, go out and be social. You’ll likely get more lending opportunities due to your networking and referrals than from anything else.
Have cards, a web site, talk to other investors. Be an accurate and good representation of yourself everywhere that you go. Get a mentor, build relationships, and pitch yourself! Pitching yourself to lenders will also mean building a relationship and trust in each other, super important when potentially going into business with someone. Talk about timelines and profit splits but avoid going for a quick sale as it will repel investors instantly.
Ideally you will find a private money lender that wants to work with you. They will be more than just a backer, they are going to be involved with you for the duration of the project. So be sure that you are not too eager to jump on the bandwagon but instead get to know the person you might be investing with. Focus on that just as much as on your desire to get investing and you should be just fine. It pays to do your homework when it comes to investing and lending in real estate.