Want Private Money For Real Estate? Know The 5 Key Secrets

Private money is the Holy Grail for Real Estate Investors in these challenging economic times.With banks stiffening credit guidelines and limiting their loans to only 70% to 80% of the property's purchase price, private money lenders are needed to fill the gap.

And even for the subject to investors, they may get a "free house", but the funding for rehab, minor fix up, holding costs (while trying to get a buyer or tenant), etc.demands private money, unless they want to rapidly deplete their own bank accounts-and that's not a sustainable business model

As for rehabbers, it used to be that they could tap in hard money private loans for 60-70% LTV from hard money lenders.

Now, even hard money lenders are looking more closely at credit, and the real estate investor had better have private lender funds for back up, in case he goes over budget or needs money for interest payments.

There is clearly enormous wealth-building potential with real estate investors able to pick up properties for $0.20 to $0.50 on the dollar from desperate homeowner and lending institutions needing to unload hundreds or thousands of REO's.All one needs is the money!

So, how can we find these private investors?And more importantly, how does one convince these potential private investors to make a private investment of $10,000's or $100,000's in your real estate project?

Now, if you want to raise a lot of private money, you have to be speaking to High Net Worth individuals with $millions in assets and the desire to invest it in a new venture.Whether these people are friends and family or whether they are accredited investors or Angel investors that you may not know, they share some common attitudes about money and investing.

So, if one understands the private investor's attitudes, and can enter that conversation, the only thing left to do is to ask for the check and start putting that private investment to work.

There are 5 Key Secrets the real estate investor needs to learn and understand, if he or she wants to be successful in borrowing private money for real estate.My colleague Bob, uses these secrets to buy nice homes in bulk (10 at a time), and turn them over for 6 figure profits.Simply put, without utilizing these 5 key secrets, no catchy phrase or elevator speech is going to bring the desired success.

Remember, private lenders are not motivated like homeowner about to lose their house.Nothing bad happens if the private lender doesn't invest his money.

So here are the 5 key secrets:

1) WIIFM
2) The 2 ROI's
3) Risk-Reward
4) Credibility
5) Trust

Here's what they mean:

WIIFM stands for "What's In It For Me?

" A private money lender is going to expect an extraordinary return on his/her investment compared to their other options.And the story, to put it bluntly must excite the private investor's "greed glands".

The 2 ROI's: As Will Rogers once said, "I am much more concerned with the Return OF my Investment, than I am the Return ON my investment.The private lender needs to have confidence in your exit strategy that will get his money back when promised.

Risk-Reward: Private Lenders of money got to be wealthy by being very careful about the amount of risk they would accept for any investment.So, unless you structure your private offering so that the risk is acceptably low relative to the reward, your chances of getting the money will be slim.

Credibility - this is a stumbling block for many real estate investors as they struggle to answer the private money lender's question: "why should I invest in you?" And here is the great secret: It's not about you, it's about your business!Learn how to structure your business so that it brings you credibility even if you have little real estate experience.

Trust - Ultimately, if you want that private money, your private lender must feel that you can be trusted to do what you say.With friends and family, one may have a head start on this.With private money lenders who have a more distant relationship, you must invest the time into building that trust.

About the Author

We help real estate investors find Private Money

Lenders to fund million dollar private mortgage investments in their real estate deals (in business 10 years).

Go To www.InvestorWealth.com

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Property Management -- Allowing A Home Based Business In A Rental Unit

Many property management companies have a blanket rule against using a real estate rental for a home-based business and often for good reason.However, like most things there are two sides to every issue.There are some types of home-based businesses that may actually help you keep a good tenant in place.Rather than have an inflexible policy, a good property management company will carefully consider each case individually.

How Will The business Impact The Real Estate Rental?

If the home based business requires a large number of people coming and going, this may have a large negative impact on the real estate rental.Simply by the number of people coming in and out, there will be greater wear and tear on the carpet, people will be touching the walls and fixtures, and the amount of trash produced will increase.The impact may not be noticeable at first glance but over time, this will definitely put a greater stress on the real estate rental.

As the business volume increases, so will the amount of traffic produced.Customers will require a larger number of parking spaces, which will quickly become an issue if the building was not designed to accommodate such volume.Complaints will start to come into the property management office as other tenants find customers parked in their allotted spaces.

If the situation goes unattended, you run the risk of driving off other potentially better tenants.You'll also want to be aware of how deliveries are to be made and how often to expect them.Delivery trucks can be very disruptive in a residential neighborhood.

Be Aware Of Zoning Laws

Regardless of your policy on home-based businesses in real estate rentals, you will need to be aware of the local zoning laws.

Some cities make it illegal to have any type of home-based business in a residential area.Sometimes these laws are subject to review and exception.

For example, running a child care business will have many restrictions but running an internet based business usually will have few or no restrictions.When a home-based business is allowed, the property management will want to consult with the tenant about the number of customers they expect on a regular basis.If a large number of clients are expected, they may fall under the guidelines of the Americans with Disabilities Act, which could have an impact on the use of the remaining part of the building.

Make Sure Everyone Involved Is Protected

If a home-based business is approved, an agreement ahead of time between the property management and tenant should be made as to who is responsible for any damage that may occur while the business is under operation.

You'll want to consult with your insurance agent to guarantee that your policy is in full force if a business is operated in your real estate rental.You may be required to purchase additional or modified insurance coverage and you may want to have the tenant take out a policy to cover your potential loss as well.

If the home-based business is very small and doesn't have a large client base coming and going frequently, such as with an internet based company, it may actually help you to allow the business because you keep a good paying tenant.A satisfied tenant is a good source of word of mouth advertising.However, if the home-based business is going to cause problems down the road and become a liability to you, don't hesitate to try to seek a compromise or refuse the rental.The short-term gain will not be worth the long-term headaches.

About the Author

Christine O'Kelly writes for Chicago Beal Properties.

With 80+ years experience being a property manager and real estate rental company, Beal Property, LLC offers an apartment rental in many of the city's historic neighborhoods.

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Get Rid of Your Clutter with File Folders

Is your home or office filled with clutter This article will provide you with some useful information that will help you develop an organized filing system with file folders.Specifics may vary from person to person; however, the following information includes helpful and important guidelines from which everyone can benefit.

You have been there before.You come home from work, toss the mail on the kitchen counter and a big pile of papers slide onto the floor in a big heaping mess.As the kids come home from school, they lave their homework, permission slips and progress reports on the counter that you just finished straightening up or neatly piling again.You had good intentions You sorted the papers and created more piles.But now, your kitchen counter is covered with a dozen different piles of paper and you still dont know which papers are in what file.Now its time to make dinner and you dont even have room to cut carrots.What a nightmare

Instead of letting the papers work your life, work with the papers because theyre never going to stop showing up By creating a small filing system, youll be able to free up your counter space so that you can reclaim your kitchen.

Plus, it will look better, too

Ok, a good place to start is with the piles you already have.

Chances are, whatever you have there is what youll have next month and the month after that.So, sort those papers into categories that make sense to you bills, magazines, homework, etc..Dont stop until each paper is in a category.Also, you should keep in mind that these files are active files, meaning that you will access them frequently.If you dont plant on accessing them every day or once a week, you should store them elsewhere.

Once you figure out your categories, this will tell you how many file folders youll need.Each category will become a label for a file folder.Youll also need something to store the file folders in - make sure you choose a container that fits If you plan on leaving the container in plain site, choose something stylish like wood or metal.If you plan on stowing it when guests come over, make sure you choose a container thats portable.

Now, you can spend some time organizing the categories within your container.You can utilize color-coded file folders to make files easier to find, and prevent re-filing errors.Colors can also serve as an alert system For instance, put all of your scheduled items in a red folder.Red draws attention so you wont forget when you see papers in that folder Things like errands to run, permission slips to sign and shopping lists are good things to put in the red folder.Put all of your bills to pay in a green folder green = money.Things like credit card bills, mortgage payments, cable bills and car payments can go in the green folder.Put your coupons in another colored folder; your events or schedules in yet another.It doesnt matter what color you choose as long as you label your file folders clearly and stick to your filing system.This will help you get rid of the clutter that claims your countertops
About the Author

Sharon Mann is President of the I Hate Filing Club, a group of nearly 100,000 office professionals who hate filing but love finding new ways to become more organized.

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