They have a lawyer write up all the documents that big conventional lenders require. The borrower will sign a promissory note at closing agreeing to the lenders terms and the lawyer will record a deed of trust securing the promissory note to the property. The best part about it, the borrower pays for that lawyer. So, if a real estate investor wants to buy a home that is worth $100,000, the private lender will probably give the investor about $65,000 max. If the investor is successful and flips the home in six months, which is about the normal time frame, then the lender will probably make about a 10 to 14 percent return on their money in just six months. If the investor defaults, then the lender takes a property with 35 percent equity.
For the original version including any supplementary images or video, visit http://www.washingtonpost.com/blogs/where-we-live/post/real-estate-investing-requires-a-new-way-of-thinking-about-your-money/2013/03/26/d0c6f0c0-956f-11e2-ae32-9ef60436f5c1_blog.html
American Real Estate Academy Radio Gets Loan Officer Secrets From Banker
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The investor has to learn to do exactly what the bank does. He needs to learn how to evaluate a commercial transaction the exact way that the bank does. Now this is where the relationship building comes in. An investor who has established a certain level of trust with the banker can then go back and ask why the loan wasnt approved.
For the original version including any supplementary images or video, visit http://www.watchlistnews.com/2013/09/16/american-real-estate-academy-radio-gets-loan-officer-secrets-from-banker/