How To Supercharge Your Real Estate Investing With Private Funding

Imagine this: You've run across a foreclosure property in exceptional shape in the neighborhood of $142,000 that is going to auction for $60,000. It's a daydream come true, right? Naturally you have to act Quick to nail this deal. That's when reality sinks in: You don't have $60,000 in hard currency just sitting in a checking account.

Now the dream has turned into a nightmare. You can run around pleading with the banks to give you a mortgage (best of luck in this market) or try to extend lines of credit. All these approaches take TIME, which is the ONE thing you don't have.

Next thing you know, the deal is gone, bought up by another savvy investor who DID have funding in place and ready. How can you avoid this scenario the next time a deal presents itself? By having the cash available to close deals instantly. That's how a real estate heavyweight operates, and a way to do that is by lining up and using private lenders!

So what are private lenders? They are regular people. Some have full time occupations, some are retirees. Some have large amounts of cash to invest available and some just have a smaller amounts set aside. Irrespective of their background, all private lenders are searching for a good return on investment for their cash.

So, why in the world would they be ready to loan money to real estate investors? Consider this: their investments are guaranteed by both a mortgage and hazard insurance policy and, if for some reason you defaulted on the note, they have the value of the house to recover their resources. They're in a very secure position!

So how do private lenders help you the real estate investor? In many ways.

For example, the two biggest advantages you can have in the real estate investment business are cash-flow and speed. With private funding, you will already have your root of funds in place and accessible. That way when a fantastic opportunity presents itself, you don't have to scramble in a panic to find the cash to close the deal, as you will already have instant cash ready so you can take action.

You can also realize great deals on properties. Everybody knows that nothing "talks" like cash. Showing a seller that you have the ablity to pay cash up front means you get better deals on properties, particularly with foreclosures. Not only can you act faster than the investor that is applying for conventional lending, you can get a bigger discount on it and pay less than they would!

The bottom line is that there are many other advantages to using private lenders too, and today's real estate investor shouldn't overlook setting up a pool of private funding he or she can draw against. You should seek them out and establish a good business relationship with them. Doing this can truly help you change from just another real estate investor into a real estate heavyweight!

This article is based a chapter of book Be a Real Estate Heavyweight, entitled The Key to Freedom and Profit in Real Estate written by Alan Cowgill. For more information on the book, be sure to check out www.RealEstateHeavyweight.com.