Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

How To Grow Your Real Estate Business Using Private Money

Written by Than Merrill

Have you ever wondered how to grow your real estate business in the most efficient way possible? Are you confident you have considered every avenue to do so? At the very least, there are countless ways to expand your own company, but I digress. Learning how to grow your real estate business may be easier than you think. Better yet, doing so may have less to do with what you know, and more to do with who you know.

Real estate is a people business; it always has been and always will be. As such, you could argue that the relationships you develop over the course of your career are far and away the most valuable assets you have to learn how to grow your real estate business. Everyone form the contractors you work with to the lawyers that help you draft critical documents has their place, and it’s probably a very valuable one at that. It’s worth noting, however, that there is one relationship you might want to consider prioritizing over all others: the one you share with your private money lenders. If for nothing else, private money lenders not only serve as your access to capital, but also a great means of financing business growth. It’s entirely possible to grow your real estate business with there help, and it’s about time more investors realized that.

How To Grow Your Real Estate Business With Private Money

Make no mistake about it, private money lenders are investors looking to make profits off of somebody else. However, their cooperation with real estate investors has essentially changed today’s financial landscape. A private money lender is an investor who makes loans secured by real estate. While they may serve the same purpose as a traditional lending institution – think government loans and big banks – there are several key differences: private money lenders typically charge higher rates than banks, but will also make loans that the average bank would usually pass on. It is important to note the difference between the two. While banks and similar lenders may offer the most attractive rates, they do not provide the same combination of speed and transparency in the decision-making process. For these reasons alone, private money is essential to growing your real estate business.

The average real estate investor relies on a steady flow of private money to supplement their respective deals.  Not only are institutional loans lengthy and cumbersome, but they can also impede the progress of a residential redeveloper.  Conversely, private money can afford investors the ability to grow their business at a steady pace.

If you are interested in using or becoming a private money lender, check out part one of our series: A Guide For Private Money Lenders.  It will give you a basic break down of what it means to be a private lender while also explaining the anatomy of the private loan.  Learn how to properly identify borrowers, choose profitable investments and more.  If you are more familiar with private lending, you will enjoy part four of our series: A Guide For Private Money Lenders: Private Vs. Hard Money.  There you will find an in depth analysis of the difference between private and hard money so that you can better determine what will be more beneficial to you and your business.  Master what it takes to get the attention and respect from these types of investors in order to maintain a sustainable real estate business.

For a visual representation of how to grow your real estate business with the help of private money, reference the infographic below:

Private money lending