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• First mortgages for income properties of all kinds.
• Second mortgages for larger income properties—commercial, residential, or other.
• Bridge loans for the purpose of buying new properties using an existing property as collateral for your loan.
• Construction loans for both new and existing properties of all kinds.
• Equity loans for well-kept income properties of almost any kind.
• Purchase of mortgage notes at a discount (called mortgage cashout) to give quick cash to the seller, eliminating years of waiting to be paid a small amount each month.
• Foreclosure-purchase loans helping the borrower to buy properties at 60 to 75 percent of their market value for flipping or rehab-bing and rental.
• Government-guaranteed loans for all types of residential income real estate in which the lender is protected by the government guarantee.
• Investor loans for real estate wealth builders who might not be able to get a loan from traditional lenders who think investor loans are too risky for them.
• Many other types of real estate loans are made by private lenders to real estate investors. Later in this chapter we’ll show you how and where to find private lenders for your deals.
Why You Should Use Private Lenders
When thinking about getting a loan from a specific type of lender, you should consider the pros and cons of each type of lender. When using private lenders, the advantages to you are many, including these four:
1. Quick service—some private lenders give an answer in just one hour, after you apply for your loan. Other non-private lenders
may take days or weeks to give you the answer you seek—a YES on your loan application.
2. Less stringent paperwork is required by the usual private lender. Why? Because the usual private lender makes more “aggressive” loans. This means that the average borrower does not have to prepare loads of paperwork to get the loan. So you’re not spending hours doing boring work to get your loan.
3. A more understanding relationship between you and your lender usually occurs when you use private sources. Why? Because private lenders are often in the real estate business themselves. So they understand your challenges and often sympathize with them. Result? You’re more likely to get the loan you request—sooner!
4. Professional help on your loan request from the private lender’s staff can often save you money and time. Most private lenders have a staff of accountants, attorneys, and engineers on call. These professionals can help you with your paperwork, loan application, income calculations, or other matters.
Yes, private lenders can give you the effect of built-in funding for your deal. They can be your powerful tool in building your wealth in real estate. So look to private lenders as one strong source of your real estate funding.
To find private lenders, look at the “Money and Funds Available” page in my monthly newsletter International Wealth Success. A number of such lenders are regularly listed there. You may be able to work with one or more of them.
Also, I’m a private lender specialist. “What’s that?” you ask. It’s someone whose eyes light up with delight whenever the words “Private Lender” appear in an advertisement, brochure, online page, or elsewhere. The result? My company, IWS, Inc., has lists of many excellent private lenders interested in making real estate loans of various kinds.
Look for the Unusual Offer
A reader sent me the information below. What does it show? It shows that this reader in Missouri was offered an excellent 12-family property
Use Sellers Having Built-In Funding for Your Deals
that he was able to mortgage-out on. Then he bought a condo apartment building for zero-cash down because the seller had the financing in place.
So, you might say, there’s built-in funding of $320,000 on the condo apartment and $10,000 on the 12-family property. Both these deals contain the “unusual offer.” Here’s this reader’s letter:
Busy Successful EWB Does Well in Real Estate
“Just finished reading ‘How to Make Big Money in Real Estate.’ I own two businesses. Am active in one as manager/accountant/owner. I manage the following real estate, which I also own:
Commercial building Value = $375,000
12-family apartment house Value = $175,000
Luxury duplex Value = $186,000
Luxury home Value = $400,000
Total Value = $1,136,000
“You will be pleased to know I bought the 12-family by over-mortgaging—bought for $200,000 with a $210,000 loan. No repairs were needed. Just closed on an 8-unit condo apartment house listed at $395,000; bought for $320,000 with zero-cash down! Current net income = $35,000. Many thanks for your help!” —Missouri
This Experienced Wealth Builder (EWB) is building his holdings by doing smart deals through unusual offers. And you, too, can find such offers. It just takes a bit of looking. But it really is worth it! Why? Because: