You’ve made the decision to invest in Real Estate and are going through the process of building your team. However, one thing keeps jumping out at you – your bank account doesn’t have enough cash to fund the $125,000 you estimate you need to buy, rehab and hold an investment property you have your eyes on.
Just like the majority of other Real Estate Investors, you need to find a source of funds to complete your deals.
What you need to do is to sit down and think like a lender.
If you were lending someone money to invest in real estate, what would you be looking for? Remember, you are putting your hard-earned funds at risk if the person you are lending to doesn’t get the job done. Hence, you will want to look at the situation very carefully before agreeing to be their lender. What are your biggest areas of concern? Before reading further, think of at least three questions you would want your borrower to answer.
Banks and private lenders go through the same practice.
Their goal is to generate a return on their capital while minimizing their risk. You need to prove to your lender that the investment you are asking them to fund is virtually risk-free. The riskier the venture, the higher the cost of capital.
Lenders look at the six C’s of Credit:
- Character – or perceived integrity
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