As you know, I buy lots of houses. How do I do that? Of course I don’t have piles of cash just sitting around…stuffed in my pockets.
I use lots of private sources of funding. Around the office we call them my Private Money Partners.
They are simply everyday people like you and I, who have money lying around in retirement accounts, individual retirement accounts (IRAs), certificates of deposits (CDs) etc etc. Which are earning very little these days.
Once I educate them on the pros and cons of funding real estate deals and I explain my house buying machine the light bulb comes on; however, for some it takes awhile. But once they get it, they start allocating funds…and in exchange for the use of their cash, they earn above average returns with real estate as collateral. Does Wall Street give you collateral??? Of course not!
Traditional lending institutions have turned the lending faucet off for me…because their system deems an entrepreneur like me as a risk. That’s what happens when you buy hundreds of houses!
While Private Money Partners serve the same purpose as traditional lending institutions, there are significant differences. One major difference is that Private Money Partners will typically charge higher rates than banks. However, they are also more likely to make loans that the average bank would usually pass on.
This makes these loans an attractive option for many real estate buyers like myself who need to find alternatives to traditional bank loans.
********************************* 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 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.
So everybody wins. It’s a WIN-WIN-WIN !!!
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).