Private Lending ED

Private Funding Concerns: Are we seeing a false bottom to the real estate market ?

The many new private lenders out there who want to fund projects with me always ask: Are we there yet? and I reply: Where? After a little chuckle they yell: the bottom! A report by Deutsche Bank last week shows still more price drops to come. All the statistics in the world will never predict a true bottom. That's because there are too many unknowns and secrets.

The first and most important one is: What will the banks do? No one knows. All we can do is use all the information we do have and make an intelligent plan. The key piece you need to know is what are your exit strategies? Do you have a plan A, B and C? You should evaluate each real estate investment with plans in hand.

If your plan is to buy and hold for the long term, how will you get out if you need to sell short term? Will the property have enough equity? What is your cushion or safety net? Answer these questions and others and you will have a secure, profitable real estate transaction. To find out how download our free report www.PrivateLendingED.com - All the best!

When a private lender funds a private money loan does the transaction close with an attorney or a title company?

As a private money lender secure profitable real estate deals are your primary concerns. When funding a real estate transaction it is wise to use a professional. Even seasoned real estate brokers who could fill out the paperwork in their sleep, would not close without one. Why? Because they know the paperwork will be handled by people who are knowledgeable and trained to keep your transaction secure.

One very important factor in keeping your investment safe, which a title company or attorney will suggest, is a lender's title insurance policy. This is often missed by private lenders because they buy with cash so it isn't always obvious that it is needed, unless you use a proffessional to close the deal! 

Where the transaction is being completed will determine whether you use an attorney or a title company. In California we close with title companies. In Georgia, the title company is a law firm. Check with your real estate investor to learn which you will be using. If they don't know, find another person to work with. A successful real estate investor should have the correct information.

I'll explain title insurance and the benfits of having it in my next post. Until then, all the best.