Ultimate Private Money Lending In Real Estate Guide
Investing in real estate can definitely be one of the safest and smartest strategies that can help homeowners build equity and wealth. With the help of proper knowledge and foundation, making an investment in real estate can surely be lucrative for many. Real Estate investors having cash to invest should highly consider private real estate money lending as the first and foremost lending option. Keep in mind real estate money lending offers a similar type of profit and the same sort of security which is very much similar to that of wholesaling or rehabbing.
What Does The Term Private Real Estate Money Lending Mean?
By the words private real estate money lending, we mean those individuals who lend their money or capital to other professional real estate funds while securing the whole loan amount with some sorts of mortgage against the real estate. Most importantly, private real estate money lending serves as a great alternative to other sources of traditional lending institutions such as banks.
As soon as a novice investor gains some experience, they try to grow big. Remember, keeping your hard-earned money in a bank savings account won’t be of great help in growing the overall assets. Private money lending helps in securing the VA loan with mortgages such as real estate whose value is much higher than that of the VA loan amount. This can indeed be a much riskier way than actually owning real estate though, therefore it’s important to get familiarized with the best types of real estate financing deals that are readily available for hungry investors.
Previously real estate financing either came from government agencies, banks, pension funds, or insurance companies. However, there is a long list of requirements that comes in the way while taking loans from these banking institutions. Private money lending is indeed a critical component in the real estate investment industry. The presence of it however makes it more possible for an average investor to maintain and run a sustainable career.
Private money lending surely comes with a host of benefits. If done in a proper way, offering other types of real estate finance options can help in mitigating risk while establishing wealth. In case you want to consider private money lending in areas such as Phoenix, Scottsdale, Gilbert, Tempe, and “The Valley” you must have a look at the following options and see if it is applicable to you:
- You are already a real estate investor and you are looking forward to expand your overall portfolio.
- You are having a nice income or having a surplus of cash.
- You have a good amount kept in your retirement savings account.
- You are already an owner of some sort of trust fund or an estate.
- You are a new entrepreneur owning a nice and big start-up.
- You have owned some sort of prize money in a lottery.
- You are someone looking for some other type of passive income investment.
The Anatomy Of Private Money Lending
The private money lending concept is comparatively new and simple. There are basically three elements that are required for a loan of this type to transpire (i.e. a lender, a borrower, and paperwork). For all sorts of purpose and intent, private real estate money lending is indeed the best way to invest with no down payment of your own required. In most cases, private VA loans charge a higher rate of interest when compared to other financial institutions but they are also more readily available in case a bank passes on. Typically when compared to banks, they don’t provide the same amount of transparency and speed especially in the process of decision making.
Ways Of Becoming A Private Money Lender
As mentioned earlier, private real estate money lending offers many benefits to everyone involved. It isn’t at all uncommon for the private investors to expand their money lending business due to these lucrative returns. In case you are interested in private real estate money lending, here are a few steps that can get you started.
- Establishing your new business and then obtaining all the required licenses and insurance.
- Meeting a practicing lawyer in order to form a company or brand structure.
- Identifying all sorts of preferred lending focuses.
- Joining peer to peer lending networks in order to find proper investments.
- Evaluating the list of potential clients by calculating risk levels and returns.
- The final step is starting the private money lending business.
Private real estate money lending can surely represent a great opportunity for all the parties involved. All the investors who were previously trying to seek alternative banking resources might find benefits including fast VA loan approval process and an increase in funding access. Apart from that, the lending might even get unique access to potential deals and investments. Above all private real estate money lending such as VA loans is indeed a great and viable way to expand a persons wealth building and financial portfolio.
Apart from all these one of the many obstacles that most of the new investors face is finding adequate funds for their new real estate deals. In case you are thinking of starting your own business of private real estate money lending in Gilbert, Scottsdale, Phoenix, Mesa or Tempe, try considering UrbanHouse Realty. The agents at UHR have years of experience and immense knowledge in all sorts of property acquisitions. No matter if you are a seasoned investor or a first-time buyer, the well-versed team at UHR has all the expertise that can cater to your purchase.