Finding Private Money Lenders

Seller check list:

• Seller owns the home outright and would consider private lending.
  
  This is one of the best situations you can find. Not only is the seller willing to extend private lending to you they are able to either carry the whole mortgage or a portion of the purchase price and you might be able to buy it with little or no money down. Some owners want to see you invested in the property and will want some money down or better yet something down. Do you have a boat or an extra car, how about a vacation rental as a straight swap, or your condo in Maui all of these are possible when working with an owner directly.



• Seller needs cash and is willing to sell at a discount for a quick closing.
  
  Even if a seller is not able to provide private lending for you someone who is in a time or money crunch will be far more reasonable to creative forms of purchasing real estate. Find out who what where how and why they are leaving their present home or investment and how you can help them achieve their goals while they help you purchase their home. Putting airplane tickets on your credit card for a portion of the down payment or renting a U-Haul for them for a week are just a couple of examples of ways to solve the seller's problems and open opportunities for you.



• A second mortgage is a good use of private lending.
  
  A seller frequently can offer a second mortgage on the property while the buyer obtains a bank loan for the first mortgage but with banks being as particular as they are now this option can be tricky to get done. You might be able to find another private lender though to carry the first mortgage.



• Seller assists in the closing costs.
  
  The biggest expense when purchasing property is the down payment. Along with that are closing costs which can run anywhere from $500 to $5000 and even more on large or complex properties. Most banks will allow the seller to contribute 3% of the sales price (some will even allow more) towards the buyer's closing costs. So for example you have $3500 worth of closing costs (these can be taxes or title fees, loan origination fees, etc.) on a $100,000 purchase price take off 3% and you only pay $500 of those costs. If the owner balks at reducing his price offer him a sales price of $103,000 to compensate him for the lost funds. It won't affect your payment much really helps reduce the amount of money needed down and is an excellent way to get private lending.


When you take the leap and start using private lending to fund your real estate purchases you will open up a whole new universe and your profits from this lucrative way of investing will sky rocket.