Finding Private Real Estate Loans For Investment Opportunities

Using private real estate loans as a way to find real opportunities can provide you with the capital required to purchase an investment property. Banks, and other lenders, who use investment property as collateral rely on the creditworthiness of the borrower for an unsecured loan. They provide private real estate loans that reduce your personal capital, and thus do not disrupt your personal investment portfolio. The rent of the proposed purchase should debt service, or be sufficient to pay the loan on it's own, and provide you with some residual revenue.

Here are a few steps to assist you in finding a private real estate loan and securing a way to finance your acquisition of an investment property.

Step 1: Research Loan Interest Rates

The first step in acquiring a private real estate loan is to research interest rates that are being offered. You can use the internet to compare rates. Having information on loan interest rates helps you determine what is available from lenders when applying for a private real estate loan.

When researching, review the cost of the loan. For example, if one loan company charges a lower rate, but significantly higher fees for the rate, the loan benefit may not be valid.

Step 2: Search for Participating Lenders

Find a lender in your area that is  willing to meet your private real estate loan needs. You can start with your own bank to get some ideals about requirements and what you need in order to secure a private real estate loan. The lender will provide you with information regarding terms and conditions for secured and unsecured private real estate loans.

You will want to speak with each lender in order to bring your selection down to your top 3 lenders. Among your top 3, look for the lender offering the best rate relative to the market, has the easiest terms and is accommodating to your needs as a borrower and real estate investor.

Step 3: Apply for a Loan

Be sure that you understand the requirements for the loan, prior to application, and determine whether you think you can meet them. This includes having sufficient collateral or credit score qualifications.

Applying for a private real estate loan takes much the same process as applying for any other loan type. Be diligent in your efforts to locate a lender that has reasonable terms and can provide you with the best loan offer in order for you to secure that investment property.