Some investors have the desire and money to get involved with real estate investments, but they lack the time. These investors play a crucial role of supplying private lending to rehabbers and rental income property. Individuals interested in either form of investment will need extensive legal guidance to protect their interests.
Private Lending for Rehabbers
Rehabbers look to partner with private lenders to maximize their potential. Under normal circumstances, a rehabber will purchase a property, rehab it with their money, and use the funds when the property sells to buy their next project. When a rehabber partners with a private lender, the lender supplies funds to purchase multiple properties and the rehabber can use their money to rehab multiple projects at once. The private lender can evaluate each project and make an informed decision to fund the purchase. The private lender has a more hands on investment without having to do the actual work. By following along with the rehab, the private lender has removed the uncertainty of the stock market while make a larger profit than the bond market.
Private Lending for Rental Income
Investors frequently purchase rental income property that needs work and is not producing any income at the time of closing. Without any income it can be difficult to obtain conventional financing from a bank. Investors look to private lenders to provide bridge funding for as little as a year and up to five years until the income property can be presented to a conventional lender. Private lenders look to this private market as a source of secured investment that consistently beats the bond market. Private lenders also use this form of investment as an opportunity to learn more about making their own rental income purchase.