What is a Private Money Investor for Real Estate?
It’s anyone! A friend or family member, colleague or neighbor, and there are companies who specialize in short-term loans. Basically, it’s an individual or entity providing a loan to help fund your real estate investment.
It benefits you, as there aren’t usually qualifications or hoops to jump through; you may even be able to get your entire investment funded. It benefits them because it’s a lower risk than stocks or investing in a company (where there is no collateral.) Simply leaving the money in the bank usually doesn’t even earn enough interest to offset inflation. Private money investors for real estate can earn a high return with collateral (the property). Everyone comes out ahead.
Qualify in a Snap
Traditional loans require good credit, low debt and proof of steady income. Private money investors for real estate place less emphasis on the personal aspect and more on the property aspect.
Even with a less-than-perfect application, if it’s an investment that stands to profit, you could still qualify. The approval process is also much shorter, as little as a couple of weeks instead of the usual 30-45 days and beyond.
What Do I Need to Get Started?
There are some things required to secure the collateral:
- PROMISSORY NOTE: This is the document that outlines the terms and conditions you and the private money investor for real estate have agreed upon.
- TRUST DEED: The investor owns the house until you pay it off, which is usually in a short amount of time. This document secures their investments and allows them to legally foreclose on the house if you do not keep to the terms.
- HAZARD INSURANCE: Name the private money investor for real estate as an additional insured. If anything happens to the house, they can still get their investment back on what’s covered.
Take the First Step.
If you’re considering a private money investor for real estate to help with your quick turn-around projects, visit RedDoor Funding. They have an easy online credit application system with all the forms you need to get started, or call them at 832-539-1099.