September 13, 2014
Private Lenders are the Best Choice for Real estate investors for many reasons, some of the more important being the speed at which you can have finance available to make deals, better cash flow in dealing with multiple lenders, no limits to how many lenders you deal with at a time as well as simple paperwork, also it doesn’t hurt that private lenders themselves are always on the lookout for Successful Real Estate Investors to Finance.
Where Can Private Lenders Invest?
Investors have various opportunities to invest, ranging from financial institutions, commodities trade, stock exchange and such, the most stable and safe investment opportunities usually have low payoffs, and investors are always on the lookout for Safe and Secure Deals that they can invest in that have high return for their investment.
Why Do Private Lenders Choose Real Estate Investors?
Working with real estate investors gives private lenders the best return for their money, the interest rate from a deal with an investor can be on average anywhere between 9% to 15% over a period of 5 years, compared to the 3% to 5% that an investor can get from a CD, Real estate investment is Extremely Sound and Secure as the Lender can take collateral out on the property itself.
Is CD Safer than Real Estate Lending?
CD’s and Real Estate are both Safe Investment opportunities, in case of CD’s you have certain preset terms that are followed to secure your interest, and save you from any kind of exposure on your investment, when we compare that to private lending in real estate generally the flexibility of setting up your own terms for the deal, as well as setting the front end and back end fees, the duration, and the collateral, not the mention the actual interest rate on the loan itself means that you can cover yourself from liability any way you want.
Why People Don’t Invest In Stock Markets as much
Individual Lenders are much more confident in investing in one on one interactions, everyone knows someone who’s been hammered in the stock market, and lost it all trying to make it big, the fact of the matter is that the real estate market is highly dynamic and fluctuating, the most that a person can do is invest a little bit here and there to diversify one’s investment portfolio, but most private lenders don’t really feel comfortable putting the big money in the stock exchange.
CD Rates are Utterly Laughable compared to Other Investment Opportunities
Considering the various investment opportunities out in the market, including the micro lending websites that have sprung up everywhere all of a sudden, CD’s are generally considered a last case scenario for investment if one is not able to find a real estate investor to finance or is not able to play the microfinance game.
Real estate investment is quite attractive, when you stop and consider the fact that one has to simply analyze the deal properly, one can make money simply sitting at home and collecting on checks.