We’re talking about something pretty cool in this blog post: how to find the best capital for your real estate flips and real estate rentals. (This is taken from Episode 24 of my YouTube series, “Real Estate Deal Talk.”)
One of the best ways I’ve been able to do that, if I’m local, is by going to all of the real estate investment associations and to all the real estate related meet-ups, because you never know where you’re going to find private money. At these meetings you’ll find good lenders who are looking for borrowers like you for some good, solid deals.
Take a look at the latter’s entire database of lenders across the country, everywhere from California to New York. You’ll want to pick a few, call them and build a relationship with them.
That is the key here. You can’t do everything through email; you really have to get to know who these lenders are—and they really want to know who you are. The more conversations you have, the better opportunity there is that they’ll be able to present you with some of the financing they have available. If you are a first-time investor and are looking for capital, they might have you put down a little bit bigger down payment and your interest might be a little bit higher than most. Your points might be a little higher, too, but over time the expectation is, after several successful deals, those numbers should come down.
What you’re also looking for is the percent of ARV—after repair value—that they will lend you. If, for instance, I have a lender who says, “Well, Abhi we are giving you 65 to 70 percent of ARV” that means that on an ARV of $100,000 they will lend up to 70 percent of that which is $70,000. Part of that will be down payment, part will be the balance and part will be the loan they actually give you.
I found many lenders, which I am using right now, from just going to local meetings and taking a look at some of previously mentioned websites. Also, go to industry events. I love speaking at the Think Realty conference, so go there. You’ll find a lot of lenders. Another great place is http://www.imn.org/ and so is the American Association of Private Lenders – AAPL. I wanted to make sure I was shouting out to all those people. They’ve been awesome to me. I’ve used them and I’ve been a part of their association for a very long period of time. I know everybody from those organizations personally; otherwise, I wouldn’t recommend them.
If you have any questions about lending, doing deals, wholesaling or anything related to real estate investing call me! Talk to you soon!
You can watch Episode 24 of Real Estate Deal Talk here: