Jason has been on the show now 3 times! It’s because he’s awesome and doing great things in his real estate investing business in Houston.
We have in on the show today to talk about finding and working with private lenders for your house flips.
Now, if you’re new to real estate investing, you probably want to start with working with a partner to fund the deal and split the profits or use hard money until you have a proven track record of several successful flips. This will make it easier to build relationships with private lenders.
In this episode we talk about:
- What a private lender is
- How they are different than hard money lenders
- What criteria Jason uses to determine good lenders from ones he’d rather not work with
- How to find these lenders during networking events
Jason really focuses on the “working” part of networking events. I think most investors in general just don’t fully appreciate the power of these events if worked properly.
When negotiating with lenders on terms, Jason likes to frame the argument by showing how he uses the lenders that give the best terms first and then moves up to more expensive ones afters he’s used all of the cheaper one’s money. So, they can ask for higher rates, but they won’t get their money out until the cheaper ones have theirs out first.
Jason also talks about his vanilla and chocolate options he gives private lenders. You’ll need to listen to the episode for that one though. 🙂
I have a guide that you use to find out exactly how to find private lenders and what to do to approach them. You can download that here:
Private lenders will typically lend at anywhere from 0 to 2 points and 8 to 12% interest. You can typically get 12 month terms and interest only or no monthly payments.
What to be careful of….
You have to be careful to only borrow from one lender for each deal. Do not pool funds from multiple people as that gets into securities and must conform to all of the laws regarding securities.
Also never market specific deals with numbers to private lenders. Find out more about this in the free download for this episode below.
Hear more of my story and what I am doing these days by listening to the recording I did with Jason for his radio show:
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