Unlocking the Full Value of Private Lenders
By now most real estate investors recognize the face value of private lenders: access to plenty of cash to buy deals at very favorable terms.
It isn't until you build a private lender portfolio and really start utilizing the funds that you realize the full potential and the full value.
Here are some of my personal experiences using private lenders...
REO:An agent was putting up her For Sale sign on a property in my target area just as I was driving by.
I asked the price and unbelievably...
it was significantly lower than anything I had bought in the area.
I offered full price - CASH with closing in 5 days.
I knew I had a private lender available so I put in a great offer before anyone could steal in out from under me and the bank accepted! Too Much Profit: Great problem to have - right? With this property, I was making so much money on this wholesale deal that I had to hide it from both my buyer and my seller.
I talked to one of my private lenders and borrowed the money for just 1 day.
I gave her a great return on 1 day's use - and made her so happy to be my private lender.
Her money allowed me to close on the property and re-sell it that afternoon to my investor buyer without ever disclosing what I paid.
2 Days to Auction: I had been working with a Seller in pre-foreclosure.
He was sure that he could do something else before the auction.
I finally gave up on him.
2 days before the house was scheduled to go to the court house steps he calls and wants to know if I can buy his house and stop the foreclosure.
I said sure, but I could no longer offer the same price.
He didn't care.
I called one of my private lenders and had the money wired to my attorney's escrow account the next day for closing.
We beat the clock! I wholesaled the property 2 weeks later! Short on Rehab Funds: As sometimes happens, one of my rehabs had some unexpected cost overruns.
I didn't panic.
I simply contacted one of my smaller private lenders and got a small loan to cover the shortfall.
No Monthly Payments: Most private lenders - especially when using their IRA to make loans - are happy to receive a higher interest rate in lieu of monthly payments.
I set up my rehabs where I have no monthly payments and I accrue all the payments until the end and use the sale proceeds to pay the debt.
Imagine never worrying about monthly payments on your rehabs! Just a Call Away: One of the facets that I love about private lending is how easy loans are to process.
No lengthy applications.
No underwriting.
No last minute surprises.
I simply call one of my private lenders; review the project in 5 minutes, send an Executive Summary of the numbers and that's it.
Approval is granted and the money is available the next day if needed.
I can not even begin to fathom attempting to operate a real estate business without having private lenders.
Second only to your customers; they are probably your most valuable resource.
The beauty is that they are everywhere around you.
All you have to do is start asking! Expect abundance, Lou Castillo
It isn't until you build a private lender portfolio and really start utilizing the funds that you realize the full potential and the full value.
Here are some of my personal experiences using private lenders...
REO:An agent was putting up her For Sale sign on a property in my target area just as I was driving by.
I asked the price and unbelievably...
it was significantly lower than anything I had bought in the area.
I offered full price - CASH with closing in 5 days.
I knew I had a private lender available so I put in a great offer before anyone could steal in out from under me and the bank accepted! Too Much Profit: Great problem to have - right? With this property, I was making so much money on this wholesale deal that I had to hide it from both my buyer and my seller.
I talked to one of my private lenders and borrowed the money for just 1 day.
I gave her a great return on 1 day's use - and made her so happy to be my private lender.
Her money allowed me to close on the property and re-sell it that afternoon to my investor buyer without ever disclosing what I paid.
2 Days to Auction: I had been working with a Seller in pre-foreclosure.
He was sure that he could do something else before the auction.
I finally gave up on him.
2 days before the house was scheduled to go to the court house steps he calls and wants to know if I can buy his house and stop the foreclosure.
I said sure, but I could no longer offer the same price.
He didn't care.
I called one of my private lenders and had the money wired to my attorney's escrow account the next day for closing.
We beat the clock! I wholesaled the property 2 weeks later! Short on Rehab Funds: As sometimes happens, one of my rehabs had some unexpected cost overruns.
I didn't panic.
I simply contacted one of my smaller private lenders and got a small loan to cover the shortfall.
No Monthly Payments: Most private lenders - especially when using their IRA to make loans - are happy to receive a higher interest rate in lieu of monthly payments.
I set up my rehabs where I have no monthly payments and I accrue all the payments until the end and use the sale proceeds to pay the debt.
Imagine never worrying about monthly payments on your rehabs! Just a Call Away: One of the facets that I love about private lending is how easy loans are to process.
No lengthy applications.
No underwriting.
No last minute surprises.
I simply call one of my private lenders; review the project in 5 minutes, send an Executive Summary of the numbers and that's it.
Approval is granted and the money is available the next day if needed.
I can not even begin to fathom attempting to operate a real estate business without having private lenders.
Second only to your customers; they are probably your most valuable resource.
The beauty is that they are everywhere around you.
All you have to do is start asking! Expect abundance, Lou Castillo
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