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• How to Find Cash Money Lenders to Fund Your Deals

  So you found the perfect deal?  Read all the MySAPro.com material and your ready to jump in and get those deals ehh?  You have to be able to fund your purchase, so why not get that house for all cash so you can offer a price that will maximize your best potential profit.  To do this, you need to find investors that will loan you the cash that you need to fund your deals.  Where do I find these people with all this cash that just want to give it away to us investors?  I am going to tell you.

  Cash lenders are usually investors that make their money by loaning cash to an individual with the hopes of making a return on their investment via a loan fee and the interest that is charged during your tenure of the loan.  They are very happy to loan cash to a investor, but keep in mind, like a bank, they can foreclose on you if the contract is written in their favor.  Most cash lenders are well informed about how to structure a cash loan in their favor, so be weary when making any deals with them.  Now that were past that!  Cash money lenders are great!  When you need a short term loan with little or no notice, these are the guys you go to.  They typically are like your banker; work with them for a while and they will keep raising your limit.  If you are just breaking into the business, you may find some stand-off lenders because they like to deal with seasoned veterans, but if you bring a good deal and present it to them, they usually have the know-all to tell if its in their best interest to loan you the cash.

  Cash lenders usually charge a “funding fee” which is their way of collecting guaranteed interest on the loan they make to you.  For example, lets say you need to borrow 25k and you are offered 20k from a cash lender and another 5k as a no interest loan that has to be paid back in 1 month and the 25k loan paid back within 3 months.  They will usually charge a nominal fee of 1-3% of the total cash loaned to you as this fee.  This usually has to be paid up front and is not refundable from the cash lender.  Also, they will charge really high interest rates, sometimes in the 15-25% range based on how large the loan is and the time you will need to keep it.  When dealing with any lender, there is most always a due date for when the loan will be due.  For many lenders, it is 3-6 months, but it can be longer, based on the relationship you develop with them.  Not all cash lenders will loan large amounts to you, so you may need many cash lenders just to find your deal — keep this in mind as well.

   Where do I find the lenders, and what do I say to them?  Well, the best thing to do is start looking in your local papers.  They are usually trying to find you as much as your looking for them.  I notice many lenders in the paper that have adds like “Need cash?  Call xxx-xxx” or “For Cash Loans - Call xxx-xxxx”, and they are all over the Sunday papers and pretty much all of the online classified websites such as craigslist and your local online newspapers.  Often times, they will be at local real estate investor meetings, because they too are investors and are looking to invest in you. 

  If you do happen to get the guts to call up a cash lender, explain to him your interest in buying real estate, talk to him about the amount you would like to start off using, and help him understand your intent.  Getting a cash lender on your side and ready to help you can make the whole process much easier than waiting till you have a deal ready to go.  Now, if you do happen to have a deal ready, present it to your cash lender and make your case about why he should invest with you.  Show him your comparables, explain the market area and why this house will cash flow.  Tell him what you plan to do and plan your plan before you plan to meet with him! 

  Being prepared and fully in control of your deal with allow you to command the terms of the loan you will receive and can help in negotiation of the rate that he is going to offer you.  If I came to you with a guaranteed winner, wouldn’t you be trying to get my business?  That is how you have to approach the lender; make them want your deal and need it.  If you present a deal to them that is guaranteed to make you a lot of money, they will do business with you — again and again.