I am trying to learn to attract private money. I am aware of Hard Money lenders, but would prefer to acquire private money and stay away from paying points.
The objection I am running into is “I am only in second position behind the first mortgage holder”. How do I overcome this objection ???
I am interested in buying sub2 and then selling via lease-option. Would appreciate any constructive advice. Thanks
if u r buying sub 2 why do u need any money besides walking money for your seller or arrears money for the current loan? are u talking about a large sum? and for what purpose?
The money could be for numerous things. Maybe the homeowner has $200k in equity and wants $100k to walk away.
OR, Maybe the house needs rehab.
Anyway, I am trying to find out…when you approach a private individual about a loan “backed by real estate”…and they understand that “backed by real estate” really means they are in second position, behind the first mtg…how do you convince them that their money is secure ???
if someone trusts you they will do business with you. getting them to trust you is up to you.
side note–about the equity and seller wanting $ to walk away: offer the seller the $100k note for the equity and the S2 sale, don’t offer it to an investor for cash. when u or ur buyer refi’s then you will cash the seller out. that is the creative way to do it with nothing extra out of ur pocket. most times, ur s2 seller will go for this to get out of the responsibility of having the mortgage to pay.
Toni,
May I ask what marketing technique you are using to attract motivated sellers ?
I keep getting sellers that WANT to sell…but don’t NEED to sell.
I’m in Florida…u ?
it depends on what you type of properties you are looking for, if you plan to keep them, and/or what your exit strategy is. for some deals, u have to get the owners to sell you on buying, not the other way around. your presentation to them should be that you are there to help them and that thier best interests are at the forefront.
marketing blanket ads in nickle and penny trader mags will get you a lot of leads, but they may be not what you want, that may be the motivated sellers u r getting. same with mass postcard saturation to 12,000 homes in 1 zip code. if you can narrow your market to 100, yes 100, not 1000, specifically targeted prospects, wouldn’t your chances of getting the lead you want be greater, and cut out the riff-raff? think about that.