Real Estate Rookie

342: How to Buy Real Estate WITHOUT The Banks (Private Money Explained)

Nov 23, 2023

Experienced real estate investors Tony and Ashley discuss the benefits of private money for financing real estate deals. They explain how to find private money lenders, structure loans, and protect yourself in a deal. They also provide tips for borrowing from hard money lenders and discuss the importance of creating an amortization schedule. The podcast covers topics such as finding trustworthy renters, protecting yourself as a private money lender, and real estate buying strategies.

44:49

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Episode guests

Tony

Ashley

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Quick takeaways

Private money lending provides flexibility and opportunities for real estate investors without relying on traditional bank financing or hard money loans.

Building relationships and trust is crucial when seeking private money lenders, who can be found through local real estate meetups and networking with individuals looking for passive income.

Private money lenders should evaluate risks, conduct due diligence, and implement safeguards to protect their investment, while also considering private money lending as a stepping stone towards long-term equity partnerships.

Deep dives

Private Money Lending: A Deep Dive

Private money lending is a valuable tool in real estate investing, providing flexibility and opportunities for both borrowers and lenders. This episode explores the differences between traditional bank financing, hard money loans, and private money lending. It emphasizes the importance of trust and building relationships when seeking private money lenders. The key documents involved in private money lending are the promissory note, the deed of trust, and the amortization schedule. These documents outline the terms of the loan, interest rates, repayment structure, and the security of the lender's investment. The episode also discusses the importance of protecting both the borrower and lender in unforeseen circumstances such as property damage or changes in the market. It highlights the need to have open communication and a clear plan in place to address any potential challenges.

Introduction

2min

Understanding Private Money Lenders and Vacation Rental Ownership

5min

Borrowing from a Hard Money Lender

10min

Creating an Amortization Schedule for Real Estate Transactions

8min

Structuring the Contract and Tax Considerations for Private Lending

4min

Finding Trustworthy Renters, Real Estate Auctions, and Insurance

3min

Protecting Yourself as a Private Money Lender

15min

Discussion on Real Estate Buying Strategies and Bootcamps

2min

Need flexible funding for your deals? Private money could be the answer. Whether you’re looking to dodge the bank or want greater control over the terms of your deal, that’s exactly what this creative finance option can provide. Our hosts can vouch for it!

Welcome back to the Real Estate Rookie podcast! Today, we’re taking a deep dive into private money—the creative finance solution that allows you to fund more deals without huge down payments or stellar credit. Tony and Ashley share how they discovered private money and why it’s their go-to financing option today. If you’re looking to borrow funds, our hosts will show you how to find private money lenders, how to structure your private loans to benefit both parties, and why this financing solution is the PERFECT stepping stone for a future investing partnership.

In this episode, you’ll also learn about the three essential documents for all private money loans, as well as how to approach your lender about structuring a deal. But that’s not all—this masterclass is for the private money lenders, too! Tony and Ashley discuss ways to protect yourself in a deal and how to ensure that you get your money back. Finally, you’ll learn when not to lend private money!

In This Episode We Cover:

How to get 100% financing for your deals using private money

The differences between traditional bank financing, hard money, and private money

How to find a private money lender for your next real estate deal

The three documents you NEED for any private money partnership

The best ways to protect yourself when lending money

Crucial tax advice for those using private money for their deals

And So Much More!

Links from the Show

Find an Agent

Find a Lender

Ashley's BiggerPockets Profile