The hard money lending industry is a superb opportunity to earn income as a personal bank. In the aftermath of the economic recession, property investors actually prefer hard cash loans over standard lending institutions. Most property investors are usually purchasing distressed bank owned properties for the purpose of flipping or rehabbing.
Sadly, current lending policies passed by banks have made it virtually impossible for anybody without pristine credit and gigantic asset reserves to get financing to purchase properties to rehabilitation. In truth even with pristine credit and good money reserves the undeniable fact the subject property must be rehabbed or has any functional deficiencies can kill the deal since the property can't qualify for standard financing.
Many times the former owner may have had a foreclosure party on the way out and destroyed or took everything in sight before eviction. This is the commonest reason investors require access to non-public money.
Making an investment in property as a license money lender is the final everybody wins scenario for you, the financier and the community as full. By providing real estate investors with fast hassle-free financing you can charge an increased rate, sometimes in the 15% range and earn an additional 3% to 5% by charging points on the loan.
Since these loans are short-term and generally repaid inside six to 9 months; the quick return of capital will permit you to lend the money continuously. Thereby creating yields above 25% a year.
In this business you not only have control over your investment bucks but you have the capability to structure deals that leverage the time and experience of your borrower.
The conventional property financier has to do a lot of footwork finding and vetting the deals, but as a personal money investor you've other investors going out finding the properties and bringing you the deals. Similarly it will only take a brief time before your client base knows your investment style sufficiently well to only bring you the deals they know you'll be interested in.
Even in business recessions the business is there. Thanks to all of the repossessions and short sales there are more than sufficient properties available for dimes on the buck.
Banks need to get these REO's off their books and smart investors need to flip them. As a private bank you will be in a position to get these financiers the money they need fast and put a 15% to 20% profit in your pocket and theirs each time.
Sadly, current lending policies passed by banks have made it virtually impossible for anybody without pristine credit and gigantic asset reserves to get financing to purchase properties to rehabilitation. In truth even with pristine credit and good money reserves the undeniable fact the subject property must be rehabbed or has any functional deficiencies can kill the deal since the property can't qualify for standard financing.
Many times the former owner may have had a foreclosure party on the way out and destroyed or took everything in sight before eviction. This is the commonest reason investors require access to non-public money.
Making an investment in property as a license money lender is the final everybody wins scenario for you, the financier and the community as full. By providing real estate investors with fast hassle-free financing you can charge an increased rate, sometimes in the 15% range and earn an additional 3% to 5% by charging points on the loan.
Since these loans are short-term and generally repaid inside six to 9 months; the quick return of capital will permit you to lend the money continuously. Thereby creating yields above 25% a year.
In this business you not only have control over your investment bucks but you have the capability to structure deals that leverage the time and experience of your borrower.
The conventional property financier has to do a lot of footwork finding and vetting the deals, but as a personal money investor you've other investors going out finding the properties and bringing you the deals. Similarly it will only take a brief time before your client base knows your investment style sufficiently well to only bring you the deals they know you'll be interested in.
Even in business recessions the business is there. Thanks to all of the repossessions and short sales there are more than sufficient properties available for dimes on the buck.
Banks need to get these REO's off their books and smart investors need to flip them. As a private bank you will be in a position to get these financiers the money they need fast and put a 15% to 20% profit in your pocket and theirs each time.
About the Author:
Tim Tavender is an author with ten years experience running his own personal loan in singapore . He has written for State Papers and Mags about personal loan .
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