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Dr. Kalinda Rose Stevenson
How Investors Fund Their Deals
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There is always money from a private money investor to invest in real estate if the deal is right.
If you think about money with a consumer mindset, you might assume that the only way to buy investment property is to buy it with your own money and your own credit. This is based on the belief that money is scarce and you have to pay for your investment by yourself.
Where do consumers go for money? They go to banks. And what happens at the bank? If you are a consumer, the bank will require you to provide a vast amount of personal information. You might feel that you have to beg to get the money. And after providing all of the personal information, it is up to the bank to decide if you are worthy to borrow the money.
Once again, it is all about you and your money and whether or not the banks think you are credit worthy. The rule with banks seems to be: If you have money, they will give you more. If you don\’t have money, they are reluctant to loan you any. In the consumer world, you have to deal with banks who decide if you are credit worthy.
What successful investors know that consumers don’t know is that there’s plenty of money available for you to invest. If the deal makes sense, there’s no lack of money. In the investor world, there are people called private money lenders. You don’t ever have to go to a bank to get money to invest in any property.
Let’s say you want to buy an investment property. You’ll need to make a $10,000 down payment to buy it. If you are looking at the investment with a consumer mindset, you might think: “The only way I can buy this property is to pay $10,000 for the down payment. But since I don’t have the $10,000, I can’t buy the property.” This is not the way a successful investor thinks. The investor would think: “I don’t have the $10,000, but I know that someone else does.” The critical difference is that the investor knows that there is money available from other people. So, instead of giving up on the deal, the investor finds a private money lender to provide the $10,000.
This is why a consumer will look at a property and say: “I can’t buy this property because I don’t have the money, and the bank won’t loan me enough money to buy it because I don’t have enough credit to satisfy the bank’s requirements. The investor can stand beside the consumer, look at the same property, and have a different idea.
An investor thinks about the situation differently. The investor knows that there is money available for a good investment. In the same situation, the investor will say: “I don’t have the money or credit to buy this property by myself. I do know that there are plenty of private investors who have the money I need.” The key factor is whether or not the investment is a good investment. It is not simply about you and your money and your credit. If the deal is good enough, you can find the money you need to buy it.
Do you need a private money investor for your biggest investments?
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