No Money Down Real Estate - Fund All Your Deals With Private Lending!!
by: Lou Castillo
If you invest in real estate, you need cash to buy houses. Even if you have a full bank account and great credit, you?ll eventually run short on funds - or short on time to obtain a loan - for the next deal. Private lending is the answer. It is a bottomless pool of readily accessible funds: whether you have great credit or poor; whether you have cash reserves or not.
?Private Lending? refers to the process of borrowing real estate investment funds from private individuals at rates higher than these lenders can normally achieve in the marketplace. The attraction of private lending is the speed and ease of funding a deal.
Here?s how it works?first you find or do marketing to find individuals interested in earning 10-12% interest (or whatever you deem affordable for you and attractive to others) on investments secured with real estate. You?ll find these prospects everywhere. They belong to your local investors association, your church, your civic club, they?re your friends and family, your neighbor next door. You?ll be surprised how easily you?ll locate them, and soon, they?ll be searching you out. Just let everyone know that you pay high interest for their loans on your real estate projects.
As prospects express interest explain that the investments are secured by real estate and do not exceed 75% loan-to-value (LTV) of the after repaired value of the home. Each investment is based on a specific property, and they can decline any property with which they are not comfortable. All you require is that they approve quickly (within 48 hours), and can fund within 7-10 days or less.
Once they have approved the investment, the funds are wired to the closing attorney to be held in escrow. After the closing, the lender will receive a Promissory Note from you (either personally, from your business entity, or both), a Deed To Secure Debt (mortgage) on the property, lenders? title insurance, and listed as a mortgagee on the hazard insurance policy.
If no single investor can fund the entire investment, then piece several loans together by providing the largest investor with a first position mortgage, and each smaller investor a progressively subordinate (2nd, 3rd, etc.) mortgage. Typically, we pay an additional percentage on the interest rate to entice investors who accept subordinate positions.
The advantages of private lending are that there is a minimal approval process, and so availability of funds is quick. You pay interest only, instead of also incurring a loan origination fee commonly known as ?points?. You are never constrained by arbitrary rules as to how many mortgages you can have in your name. In fact, none of these mortgages ever show up on your credit report. In turn, the private lendor receives a higher interest rate with a very secure investment. Everyone wins!
Now you may be wondering how many people you know really have $75k -$100k -$150,000 just lying around ready to invest. More than you think - and most of them don?t even realize it! That?s because the money is tied up in their IRA?s which they believe can?t be accessed until retirement. That?s only half true. They can?t personally withdraw the money without suffering penalties; but they can invest their funds (and receive your interest tax-fr ee! if it's a ROTH IRA) if they rollover into a self-directing IRA.
A self-directed IRA is administered by a third party institution (we recommend Equity Trust Company in Ohio www.trustetc.com ) and allows the IRA owner to make decisions relative to the investment of the funds. In other words, the IRA owner can decide to use his IRA funds to make a real estate investment in your property. Most people do not even realize this as a possibility. They believe their money must stay tied up in an IRA until retirement earning nominal interest. Imagine how thrilled they are when you provide this alternative! Imagine how much money is currently sitting in traditional IRA?s that you could tap into. There are more funds available than you can use. Isn?t that a nice problem to have?
Since Equity Trust Company has all of the forms on their website, I ensure that making a loan is as simple as possible for my private lenders. I prepare all of the required documents so all they have to do is sign and fax to Equity Trust. From that point on, the private lender has nothing else to do. Simple. Easy. Their next task is approving the payoff when the loan is re-paid. Because the loan process is so simple, and the interest rate so favorable, investors are always begging to re-invest. This truly is a bottomless pool of investment cash.
Don?t forget that if you have cash in an IRA, you can also increase the interest you?re earning by becoming a private lender. You can not invest in any property or company in which you or your family have a vested interest, but you can invest in the projects of other investors which you know and trust. It?s a great way to leap frog your IRA.
Have a rich week,
Lou Castillo
About The Author
Lou Castillo FREE! Real Estate Investing Secrets To Earning $100,000 Your 1st Year! -- 11 Overlooked Real Estate Statregies That Will Turn Your Investing Business upside Down And On The Fast Track TO Success...Guranteed! Plus A Bonus Track With A Secret So Successful It Can Double Your Investing Income Overnight! http://www.InvestorSuccessTactics.com
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Easy Ways to Build Up Your Savings
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Building and maintaining a savings cushion is vital for your financial health. Most financial experts recommend having a minimum of three months' worth of living expenses set aside in case of an emergency, but many people may find it difficult to build up that much money in savings. If you think that you might have difficulty in building up the savings that you need, you might want to consider some of the following ideas.
Focus your spending
Create a budget and track your spending. After seeing where your money goes, it's much easier to decide where you can cut. Then live by it.
Treat saving like a bill
Consider your monthly savings amount a bill that has to be paid. Pay your account every month or every two weeks.
Think small
Many people don't think their budget allows room to save, but even a small amount adds up over time. Depending on the size of your family,...
Easy Ways to Build Up Your Savings
Ira > Easy Ways to Build Up Your Savings
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Health Savings Accounts - What You Should Know!
Ira > Health Savings Accounts - What You Should Know!
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Such a distribution may be substantial and may represent the cornerstone of your retirement security.
So it is important to consider your options carefully before making a decision regarding distributions.
Basically, you are faced with two main options.
Should you take a direct distribution and pay your taxes now?
Or should you roll your distribution over into a traditional Individual Retirement Account (IRA)?
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Ira > Know How To Take Your Lumps
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If you fall into the Baby Boomer generation, having been born between 1946 and 1964, this 3rd stage of life, retirement,
is right in front of you. Keep in mind, that potentially, this is the longest stage of life, possibly lasting 20-30 years. Dont' fail to prepare for this very important transition into your retirement years.
The prospect of actually becoming a retiree looms larger as the years go by. Fortunately, it's just become a little easier to build savings for your retirement years. Why? Because, starting Jan. 1, you can put in $1,000 in "catch-up" contributions to your traditional or Roth IRA, up from $500 in 2005. So, given the $4,000 annual limit for regular contributions, you can put in a total of $5,000 to your IRA in 2006.
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Take Advantage of Higher IRA "Catch-up" Limits
Ira > Take Advantage of Higher IRA "Catch-up" Limits
Ira No Money Down Real Estate - Fund All Your Deals With Private Lending!! tax help
skirts Ira No Money Down Real Estate - Fund All Your Deals With Private Lending!!
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Tire safety is very important. Here are some regular checks that you can perform on your tires to insure your safety:
Lumps or swelling. Any lumps or swelling that appears on the sidewall are signs of tire weakness. If not attended to, it can lead to tire blow out.
Irregular tread wear must be checked out immediately. One of the best ways to check your tread depth is to do a "Penny Test". Stick a penny into a tire groove...
Ira No Money Down Real Estate - Fund All Your Deals With Private Lending!!
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