Monday, March 24, 2014

How to Find Private Lenders

    A private money lender is a non-institutional individual or company that loans money, generally secured by a note and deed of trust, for the purpose of funding a real estate transaction. They are generally considered more relationship-based than hard money lenders. It is very common to find many new real estate investors spend a lot of time learning how to find deals at the expense of finding ways to raise money or equity capital from private money lenders. It is of great importance that investors start realizing that both finding deals and raising money for investment are equally important.

You cannot tie up or purchase a deal if you don’t have money. This is what it means to work smarter rather than harder. You will always be expected to place some good money as down payment for any property you wish to purchase. Raising even a hundred dollars to use for buying may be a problem especially if you are currently living on paycheck to paycheck. Investment success will come your way if you can work on ways of raising capital from private money lenders. Deal with no money is not an investment. In most cases you will find real estate investors spending a lot of time, hours, days or even months finding the next deal.

The next question is how can one find private money lenders? Simple, below are some of the ways to find private money lenders;

 By running an ad in the papers as a way of advertising, e.g. like this;
Private Money Needed
Earn 14% plus 5 points
Rental, 70% Loan to value
$65,000 call ………………..(your phone number)
You may be shocked to receive many phone calls from different people willing to give you the money.
You can also look at your local newspapers to find lenders advertising availability of private money. Alternatively, make phone calls to several agents who work with investors or property owners. You can also ask escrow officers to tell you those who loan money privately.
It is also important to develop multiple lender sources. This is necessary even if you plan to use your own money. This may assist you especially in a situation where your funds are tied up and an opportunity arises with great deal in place. This will definitely lead to your success as an investor.
By using your family members, friends and even your relatives. Approach them with an opportunity that will make them earn higher yields in terms of interest on their money. Explain to them what you intend to do and I believe you will succeed.
Real estate investors and businessmen are also a source of private money. Build a good relationship with them. I believe they always have some additional money to lend out to other investors. They are very receptive to this because they know what it really means to invest in real estate; very comfortable with this industry as a whole. Apart from lending you money they will also give you some coaching on deal analysis and give you some tips that will make you grow as an investor.
Networking with other people especially at social networking sites. Share your business and experience with them and you will be surprised to find somebody willing to lend you money.
 Make use of online databases. It is possible to the private money lenders in your area/locality. Take your time and compile a list of addresses and names of the private money lenders. Take your time and email them by informing them about your business. Don’t you think this can make you receive positive phone calls? Yes of course and you will not miss to get capital for your real estate deals.
To your Wealth!
Russell Roesner
Equity Coalition
(415) 680 3454

Sunday, April 1, 2012

Why do people fail to Quality for Hard Money Real Estate Loans

What Are the Top Reasons Real Estate Borrowers Fail to Qualify for Private money (hard money loans)?
Call us: 415 680 3454
I receive calls everyday from Real Estate investors wanting to borrow private money (hard money) through my company and more often than not, I have to tell them no. Inexperienced borrowers often make the same mistakes so let's review them.

1) No down payment or too small of a down payment. 
Private lenders require a minimum of 35% down most of the time. If you are looking for a no money down loan or very little money down, the only place to go is to either friends/family/business associates willing to co-invest with you or to the banks. Regular banks have a product from the Federal Housing Authority called FHA where you can buy a house for as little as 3% down. However, these loans are difficult to qualify for and can only be used for personal residents and not for investments. 
2) The purchase price and loan for a home is just too small. 
In places like the San Francisco Bay Area of California and New York City, this is usually not a big problem but private lenders do not like to make loans for less than $100,000. If you are looking at properties for sale under $100,000, you should probably look elsewhere. Private lenders make their money on the points and if a loan is $100,000 or $1M, the amount of work is the same. 
3) Borrower is trying to buy at auction or at the courthouse.
Auctions require all cash offers and almost never allow for financing. If you are buying at the courthouse steps, a private lender cannot help you because the home will not be able to qualify for title insurance until the trustee's deed is delivered. (usually 1-3 weeks after the house is purchased)
4) Borrower is buying an REO or short sale and has made an "all cash" offer. 
90% of the time, banks (who sell almost all short sales) award a purchase contract not to the buyer offering the most money but to the buyer that can close the fastest. If a borrower states they are making an all cash offer and they really need to borrow some of the money, the bank will stop the sale and move to the next person in line that really has the cash to close. 
5) Borrower thinks their property is worth more than it is. 
This happens most often with refinancing. Please, if you are looking to get a loan on your real estate, spend a few minutes looking on websites like Zillow and see what the value really is. If every house within 6 blocks of your home is selling for half or less than what you think your house is worth, you are probably wrong and won't qualify for a loan. 
6) Borrower is buying in an area with an extremely high amount of foreclosure sales. 
Unfortunately, even if a borrower is getting a great deal, it will be very difficult for them to resell their property at a higher "retail value" even if they fix it up and a new buyer wants it. Why? The reason is that banks require appraisals and if there are no retail sales at the higher price near the subject property, the house will not appraise for the purchase price so the buyer won't get enough of a loan to buy your house.

Now that you know what not to do, if you still think you can qualify for a private money/hard money loan in California, Nevada, or Arizona, go to our website

To your Wealth!
Russell Roesner
415 680 3454

Monday, January 17, 2011

Making Money with Adsense & Affiliate Marketing

So, I make about $50-$100 from my blog through just AdSense. Before you say, "gee, that isn't much", realize I make much more than that from business deals I get through people who read my blog. I get people/companies looking to borrow money, companies looking to invest money in my clients projects, consulting jobs, (at $250 an hour) and those looking for information about what my blog is about. (Raising capital and finding investors)

A level one company makes money through selling its product or services.
A level two company is level one but also makes money through online advertising as we do through AdSense.
A level three company does 1 & 2 but takes advantage of affiliate marketing too.

I'm going to post a link about option two right now. I'll revisit this post to explain option three in the next week or two.

Check out this blog that gave me the idea to write this article.

As I work on this post, you will be the first to know about the research I've done if you become a follower. Thanks.

To your wealth!
Russell Roesner
415 680 3454

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Thursday, December 16, 2010

How do I become a lender with deeds of trust?

How do I invest in deeds of trust?
One of the best investments you can make is in a trust deed. Simply put, you become the bank for someone looking to put a loan on real estate. Yields to you can range from 7-15% annually and you can even use money gathering dust in your IRA account too. Most commonly interest payments are made monthly creating a nice form of income.

What is the process?
Most investors use a local private lender/broker who already is set up to do deeds of trust or hard money loans. The company will market to borrowers and when a loan comes in, they underwrite the loan just as a bank would. However, instead of the loan being funded by a bank, the lender will use investors like you to obtain financing. What do these brokers look at before deciding to offer a deed of trust to their investors? First of all, they look at both the borrower and the property to see if the loan request makes sense. Here is a short list of items they look at:


Real Estate

Credit Score


Income/Tax returns, W-2s, rents


Assets-Cash , investments, Real Estate

Loan amount vs. value (LTV)

Experience-invested in RE before?

Title- liens currently against property?

Exit Strategy – How will loan be repaid?


Type - Commercial, residential, land, etc.

Income – what is potential rental income?

After the analysis, the broker usually will decide to do the loan and send the borrower an offer sheet outlining the terms of the loan. If the borrower accepts, the broker will then notify his investors there is a new loan to fund and send them an offering.

How do I decide if this loan (deed of trust) is for me? Unless you are making a loan yourself, you are probably putting a lot of faith in the broker who sent you the offering. A few questions to ask yourself and the broker come to mind.
  • What is the loan to value? The higher the loan to value, the riskier the loan because if something should go wrong, there is less equity in the property if you have to foreclose and sell it to get your money back. Typically, 50-65% is the maximum you want to go.
  • Can the borrower make his loan payments?
  • If the borrower cannot pay, could we rent the property?
  • Is the property in a stable market?
  • What is the exit strategy of the loan? This is by far the most overlooked but most important question. After the loan comes due in 1-5 years, how will the borrower pay us off? A few ways are refinancing with another lender or selling the property.
  • Does doing this loan make sense? Why can't the borrower do a regular bank loan? Find out!
So you have decided to make a trust deed investment. Now create your own loan criteria that you can discuss with the borrower or the broker.
Loan size preferred or amount you want to invest?
What areas will you lend within?
What is your interest rate return minimum?
What is your minimum and maximum loan term? Less than 1 year? 1,2,3 or even 5 years?
What is the maximum LTV you will go up to?

Where do I find available trust deed offerings?
We can put you on our mailing list and when new deeds of trust come available, you will receive a deal sheet with everything there is to know about the opportunity.

I still have questions.
We are at your service. Our contact information is below.

Russell Roesner
415 680 3454

Friday, December 3, 2010

Hard Money: What is it and how to get it

Hard Money is a term for a loan product offered by private companies instead of the banks. It is also referred to as Private money, Private lending, and Bridge money. Usually the capital comes from private investors that live locally to where the loans are being made. Although the loan process is similar to a bank, there are distinct differences. First let’s compare bank money with hard money:

Bank Money Drawbacks

Bank Money Benefits

Hard to get

Low interest rates: 4-6%

Takes a long time (45-60 days)

Low Closing Costs: 1-2% of loan amount

Minimum Credit Scores Imposed

Long Term: Up to 40 years

Property must be in good condition

Small down payment: As little as 3%

Only 4-6 loans per person

Available Nationwide

Personal Guarantee is required

Money is always available

Borrower cannot be a company

Hard Money Drawbacks

Hard Money Benefits

High interest rates: 9-15%

Easier to get and to qualify

High closing costs: 4-8%

Quicker to close: 15-30 days

Short Term: 12-60 months

Credit not as big of a factor

Limited Area: Only lend locally

Borrower Can be a company: LLC, Corp

High down payment: Up to 40%

Personal guarantee variable

Property can be in any condition

Why use hard money?

Most borrowers who use hard money do it for the following reasons:

  • They personally cannot qualify or the real estate does not qualify for a regular bank loan.
  • They do not have time to wait for a bank loan to be approved.
  • They want to borrow money with a business entity and/or do not want to personally guarantee a loan

Even though the rates can be high, hard money can be quite useful when an investor has an opportunity to buy a property for a low price and sell it for a profit. Simply put, hard money even with its drawbacks can be a great tool in providing the capital necessary to be a real estate investor.

How do find a private lender and get a hard money loan?

Please review the loan programs section of our website where you can learn more and inquire about a getting a hard money loan. Our contact information is below.

Russell Roesner
Equity Coalition President
San Francisco, CA 94104
415 680 3454
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