When is the Best Time to Use Private Money Lenders?
“The simple answer is anytime you need all cash, which is most of the deals,” said Conner.
From auctions to pre-foreclosures, to properties for sale by owner and those owned by the bank, private money just makes sense in the grand scheme of thing, offering cash for the cash deals you really want.
“In a majority of cases that is why real estate investors miss out on the deals, because they don’t have the money,” he said.
So, when wouldn’t you want to use private money in a real estate transaction? Conner said you can skip private money lenders for flips.
“For example, you don’t need private money in a wholesale deal,” he said. “You can go out and get an option on a house, and we’re going to flip it to another real estate investor, and we’re going to get an assignment fee of $5,000. You don’t need private money for that.”
Conner also said you can also buy a house or property subject to the existing note without private money. In all other cases, you should definitely consider the advantages. But, do you know what they are? Find out on the next page.