Tips for Working With Private Money Lenders
This video provides a wealth of information on how to work with private money lenders. Real estate investors understand that they cannot buy or rehab a property without money. They require a loan from a lender, which can come from either hard money or private money lending.
Hard money lending is a loan offered by financial institutions such as banks, while private money lending refers to lending by a private organization or individuals.
When working with private money lenders, one must know several things. First, they should know that private lenders can be everywhere. Therefore, they must talk to people continuously about money and investment opportunities. They should also be clear about what they want and have proper documents. Doing this helps with transparency and clarity about the terms of the loan agreement to avoid disputes.
Next, they should be able to negotiate the terms of the deal. In private money lending, terms are 100% negotiable; thus, one can agree on a reasonable percentage to land them loans. Then, they should agree on how to get the money. Usually, private money lenders wire money to a title company, where individuals have to sign a promissory note and other closing documents.
