I have a group of Private Money Partners, i.e. Affordable Housing Partners Group…because banks require real estate entrepreneurs like me who want to borrow to money to buy houses to make a down payment of often 25%. Typically, they’ll loan 80% of the appraisal or purchase price, whichever is lower.
When I find a good deal, it is often because the sellers need to sell right away. If they had the luxury of time and could wait ninety days, they would and probably sell for more.
Unfortunately, banks don’t move quickly, thus they will not make a new loan in a few days. Dealing with a bank takes longer and costs more than other sources. When you borrow from banks you will pay high closing costs and they’ll charge you the current retail rate of interest.
You’ll go through a “financial-oscopy”
The paperwork you’ll be made to sign will protect the bank, and if you read the fine print, you give them the right to take other assets that you own if you cannot repay the debt.
I buy lots of houses so the banks have long been off my radar because they have limits to the amount and number of loans that they will make you, and, eventually, the banks may refuse to make more loans.
I buy lots of houses. Hence, the reason why I have multiple Private Money Partners that fund my real estate purchases.
What’s in it for them? Well, I’m glad you asked. For the use of their money they earn above average rates of return. Also, their money is secured with a mortgage on the real estate.
So in essence, my Private Money Partners function as my bank.
********************************* If you are reading my blog for the first time, let me inform you that… My company buys single-family houses and I write this blog bi-weekly which is primarily directed to educate 1 group of individuals:
Individuals who are losing their shirt as a result of the “roller coaster” volatility of the stock market and low paying rate of other traditional investments, i.e. people that are looking for an opportunity that’ll provide a secured place to put their money to get it working for them to earn better than average returns.
However, often times, homeowners that need to sell their house, stop by to take a peek because they are curious and wondering how and/or where we get the funding to purchase houses. And if they stick around long enough, they begin to understand why individuals partner with us to provide the funding which empowers us to be able to purchase real estate on a continual basis. Simple, it’s because we teach them a secured way to earn better rates of return than they are currently earning.
Request your FREE Education Kit if you are interested in learning how passively investing in real estate may help place you in a better financial position.
Disclaimer: This site is intended for educational purposes only. I am not an accountant, attorney or licensed financial planner. While the information I’m writing here is based on many years of experience buying houses that doesn’t really constitute professional advice (since everyone’s experiences and situations are different).