Do you want to have leverage when it comes to your business deals? If so, then it would be better to have some form of fluidity; receiving cash as capital from private cash lenders. This means that you don’t have to go to a bank to get funding and most private cash lenders only care about your track record as a real estate investor. They don’t care too much about your credit history or credit score. To protect themselves, these private cash lenders have to be first on the deed of trust or on your first mortgage on your real estate property. This allows your money to be secured by the property, which acts as the collateral.
Private cash lenders base the transaction on relationships and in some cases, these lenders may be family members or friends who want to help you out. How do you find these private cash lenders? The answer is simple. They are around you every day. Many of them have savings that are getting them low interest rates while sitting in a traditional bank. If you offer them higher interest for the money that they will loan you, most of them will show an interest as long as there is a viable and legal contract to solidify the transaction.
In some cases, these family members or friends will also love to share in the profit as opposed to collecting higher interest. You can negotiate the lending terms, which should include amount to be funded, whether long term or short term; whether in a lump sum or in installments and the interest rate as well as fees associated with the actual loan. Even though, this is a family or friend, you should still conduct the transaction professionally. Look around you to find the private cash lenders that will help you in your business venture.