Now that the mortgage market for the purchase of real estate investment is all but dead – investors need to have other sources available or out of business. Fannie and Freddie will no longer be available to investors mortgages, traditional banks and savings and loans will not touch the investors loans for many years to come hard and lenders of money, when available, can have the total cost of more 25%. The answer is private money raised from the people, not the banks, through a process called private loans. Here are the four main ways of attracting and developing its group of private lenders.

Group of private loans presentations

For the presentation involves obtaining private loans of 5 to 20 people in a room and make a presentation of the group in setting out the details and benefits of its private loan program. This may not be for everyone, depending on your comfort level to speak in front of a group of people. However, there is great advantage to group meetings. When people start to ask questions and telling positive stories of a certain level of group begins to think of force and can be very powerful on the audience.

One-on-one meetings

If you are not comfortable with group meetings – one-on-one meetings are a great alternative. I generally recommend a quiet breakfast in a restaurant where you can take from 15 to 45 minutes from time with his perspective. Like the reunion of a group that needs to establish its private loan program details and benefits.

Outside the city perspectives – Kit credibility

If the prospect is possible outside the city needs a good kit of credibility can send in the mail. It is very important to follow up on two or three days after sending the packet to see if they have any questions. Even if you do not participate immediately, keep in touch and that may invest some time on the road after a number of follow-up contacts.

Existing private lenders

If you already have a private lender or lenders, be sure to keep asking if they would like to participate in more bids. He was surprised that most investors give only a very small investment to start and wait to see how things were before giving more money. Therefore, keep asking and do what you say you’ll do to develop a better relationship and level of trust with you. As the relationship grows it will invest more and larger sums to grow your real estate investing business.

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Private lending is the practice of borrowing money for a real estate investor to be used for the purchase of rental real estate directly from private lenders, rather than a commercial bank or other lender. Private lenders tend to be ordinary people, such as doctors, lawyers, accountants, entrepreneurs and potential retirees. Most private lenders are simply looking for better returns on investment that can normally obtain bank CDs, money markets or bond investments. During the last couple of years such investments have yielded a paltry 3% to 6% of pretax charges. After taxes and inflation have these investments, in some cases, produce negative returns for its investors. This is why people are looking for better returns and private loans is the answer.

Private lenders are looking for returns at 9% and 15% of the range and guaranteed by the local rental real estate. This kind of performance will give investors a positive return on investment of almost 300% more than CDs and money markets. The result is a perfect combination of private lenders in search of a better return on their money and secured by real estate and real estate investors seeking cash to fund operations and the ability to pay higher returns.

How to find private lenders

As a real estate investor looking for private lenders, realize that private lending opportunities do not always reach you. You may have to go out and find them. The best way to find private lenders is through networking and low-key marketing. Ask people you know directly or friends of friends about the amount of money they are doing with their investments and they like to learn how to increase the yield by 300%.

Let people know that this is a real estate investor who is paying private lenders 9% to 15% or more and secured by the local rental real estate. Those who are interested in learning more to ask questions and express interest. For those who express interest you might want to organize a private one-on-one meeting or meeting of a group with several people to submit their program of private loans.

Advertising for private lenders

You can make certain types of advertising of private lenders, but it is very important that the use of relatively low-key publicity and usually in small local areas. We do not recommend any form of Internet advertising. With Internet advertising can not control who will read your ads and the SEC may consider advertising as an application. You do not want that to happen and cause all sorts of problems.

A much better solution can fly in communities for the elderly or bulletin boards in local grocery stores. Your advertising should be limited to offering to provide information that is opposed by offering investment. Public speeches for seniors or groups of financial professionals is an excellent way to offer to provide education, and in many cases, lead to people seeking more details about its program and potential investors in the line. The important point is to keep it under lock and local street and it was clear the problems

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Help is available to borrowers who have claims against predatory lenders. Lenders across the country are violating the Truth in Lending Act and other State laws regulating mortgage lenders and mortgage brokers.

If you are a victim of predatory lending or mortgage lender of fraud, you may be able to cancel the mortgage and apply 100% of their payments to the principal. It may also be able to recover money damages.

If the answer to any of the following questions is “yes”, please leave your mortgage closing documents and audit of its loan documents for violations.

1. Have you refinanced your loan several times? It was the last refinance in the last 3 years?

(A common practice is predatory “flipping” which involves “repeatedly refinancing a mortgage loan without benefit to the borrower, in order to benefit from high rates of home, closing costs, points, prepayment penalties and other charges, steadily eroding the borrower of equity in your home. “)

2. Did you increase rather than reduce its refinancing rate to?

3. Are you paying an interest rate in excess of 9.5%?

4. The loan was obtained to pay for home improvement work that was not done properly, or even at all?

5. Have you had problems with the mortgage company in connection with the premature publication of the monthly payments? Sudden increases in payments? Adding the amounts to your balance of insurance, property preservation, “or other” progress “? Does your principal balance never seem to go down?

6. He was charged high closing costs (points and fees) in the mortgage?

7. Are the terms of the mortgage change to its detriment in the last minutes before closing?

8. Does the lender of money to pay her mortgage broker (look in your HUD-1 settlement statement for a “premium” or POC (paid closing) “YSP” or “yield spread premium”)?

9. If you have an adjustable rate mortgage, any adjustment that is done incorrectly? Can you say whether the adjustments are correct or not?

10. Does your loan have a prepayment penalty?

11. Do you think they were treated unfairly by your mortgage company? He has corresponded with the mortgage company gone unanswered? (Mortgage companies have a legal obligation to respond to complaints and requests for explanations of accounts. Often, they do not. Each failure may be entitled to $ 2000. If your claim against the mortgage company may exceed the number of monthly payments allegedly lost, the mortgage company may not be able to demonstrate that it is in default.)

12. Are all collection of letters sent to you by debt collectors to comply with the Fair debt collection Practices Act? (Up to $ 1,000 more if not.)

13. Did you (or anyone with an interest in the property and lives in the house) receive a “notice of right to cancel,” which was not completely filled?

14. Have you received your copy of the loan documents at the closing (instead of being sent to you later or that the closing agent to send you signed copies at all)?

15. Would you sign a document at the closing stating that you do not cancel?

16. The closure will occur by mail, or at home, or in another city?

There is a common scenario (between judges, borrowers, and the public) that mortgage companies do not wish to exclude and purchase real estate. This assumption is no longer well founded.

There is an increasing number of “dumps” that buy bad debts, including mortgages, for a fraction of the nominal value and the attempt to enforce them. These entities benefit by exclusion.

“Mortgages sources of confidence that some unscrupulous lenders are about to allow certain borrowers to fall into a deep financial hole from which they can not escape. Why is this? Because it pushes these consumers into foreclosure, where the lender grabs the house and sells it at a profit. ” Robert I. Heady, the people’s money, “exclusion, you should avoid it,” South Florida Sun-Sentinel, Feb. 25, 2002. In addition, if the loan is secured (by the private mortgage insurance or government), a mortgage company can be more profitable to shut down and make a claim on the collateral.

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