Private Money Sources
Private Money
Private Money will enable you to purchase real estate without contributing a penny out of your own pocket.
Seller FinancingSeller financing presents the real estate investor with numerous advantages. In fact, it is the absolute best way to get the money you need to purchase the seller's property.
Subject to Real Estate Investing
The short explanation of subject to real estate investing is purchasing the home subject to an existing mortgage.
Private Investors Money Lenders
Private investors money lenders are different from partners, and all of the money you will ever need you can find from investors.
Real Estate Promissory NoteA promissory note is simply an I.O.U. It is an agreement to pay a certain amount of money at a specific time or in payments.
Real Estate Business Partners
Real Estate Business Partners is at the bottom of the list for ways to find private money.
Real Estate Business Partners
Buying Real Estate with Private Money
Benefits of Real Estate Business Partners
- No credit check
- No loan applications
- Less waiting
- None of your own money
- Better rates
- Easier to find
However, there are some drawbacks as well, such as…
- Paperwork
- Some banking costs
- Some closing costs
- A lot of stress – because if you start to lose, the partner is not always very understanding
If you are going to do a partnership, make sure you talk to your attorney and your CPA, first. Let them set up the partnership, or you are going to be in a real mess.
Prospective Partners
You can find prospective partners in anyone with money.
- Professionals – Doctor, dentist, accountant
- Friends
- Neighbors
- Co-workers
- Church
- Club members
What Would Attract a Partner?
The things that attract a partner would be good deal, tax breaks, profits and prestige.
Forms of Partnerships
There are several different ways to set this up. So how do you decide? You get your attorney to help you. Don’t just pick one. That’s not the way to do it.
- Joint venture or general partnership (same thing)
- Limited partnership
- Limited liability company
- Land trust
- Tenants in Common
Sponsored Compensation
You deserve to be paid for doing extra work. If you go find the deal and you’re managing the partnership, and you’re collecting the rent, and you’re doing everything else, you deserve money for that. That needs to be agreed upon up front in the partnership agreement.
Partner Options
There are basically three different types of options for setting up a partnership real estate deal. The most common scenarios are based on also having a private investor. Then the options vary according to how much the investor has contributed. The real plus in all of these scenarios is that you are not contributing any money…nothing.
When the home sells, the first money source has to be paid, then whatever the partner has put in is paid back…every penny. After that, any profits are dispersed according to the ownership…not split. Remember, you cannot put that word in there. It’s not “split”. It’s “dispersed according to ownership”.
To learn more about Real Estate Business Partners and the various partner options, you need to get Dennis J. Henson’s training package, “Private Money”.
Finding money is a skill that will make your real estate investing endeavors successful. Dennis J. Henson's "Private Money" teaches you:
- the skills you need
- the legalities
- the pitfalls to avoid
- the intricacies of promissory notes
- seller subject to
- and dealing with private investors
If you want to succeed at real estate investing, this is a learning tool you cannot afford to pass up.
