Does Anyone Use Private Investors To Buy Homes?
I'm toying with the posibility of searching out some private investors to put the money up for houses and offering them 10-12 yearly interest. Does anyone else do something similar to this or all we all using our own money? Aslo does anyone have any ideas about finding these people? thanks
I know people personally who use private money lenders (hard money) and they do very well for themselves! Just keep in mind that 10-12% interest get quite expensive if you are holding it for more than 6 months or so. They use hard money for mostly rehabs that they finish within 4-6 months!
Good Luck!
[addsig]
I recently helped set up an private investor in another state with a similar deal 2 points and 12%. THere are people with retirement income and or HELOC money that would like to have the cash flow.
Were I not using my HELOC 100K that costs me 3.5% at 12% with 2 points comes out to $875 cash flow a month or $10,500 a year. My parents are looking for ways to make $$ and have hundreds of thousands available through the same deal.
The only Caveat is that you must be above reproach, experienced, and or have a real good plan before people will invest their money with you. I personally am real picky about who I do business with. They must be honest at home and at work and have a history.
ONe thing I offered was to put my $$ into the deal (i.e. 50K on a 200K deal) to further enhance the ratios for the cautious investor.
Good Luck
[addsig]
Yeah that is what I am hoping to accomplish. Also to let them know there money is secure can I put a lein on the house with their name on it?
What I've done on many such, is have my money partner buy the property in his name,so he has the deed.
He & I then have an unrecorded agreement on our split and, as I tell him when I sell him I have to trust him, and not vice versa.
He can sleep better knowing he's got the deed, or the note & D/T if we've done a pvt loan to somebody with a need.
I'm personally allergic to borrowing money, but I know a number of successful guys in the area who routinely buy flippers with OPM, and have straight deal to pay the money guy 12%.
thanks for the input. I'm trying to decide which route to go. Traditional financing or investor financing.
I am kind of reluctant to bring in an investor as a partner because I am nervous he'll ask for more than i want to give him and cut into the profit and not doing anything but lending me the money.
On the other hand if i could get an investor to put the money up the carrying cost for myself would be much lower than with traditional financing.
They would be fools not to require a TD be recorded. and to watch the LTV. Many HML only lend to 65-70% LTV
TD ?