Investor Looking For Funding
I am a small contractor. I need equity loans for small remodel projects $10,000 to $50,000.
Are there investors willing to invest in second mortgages?
As a former Mortgage broker I understand the Loan To Value (LTV), credit scores etc.
Looking for funding for these projects.
Southwest Missouri area.
Reply from Joe
The rules have change on bank financing for home equity loans.
Additionally, it's nearly impossible to get a fix-up loan on an investment house to complete house remodeling projects.
There are Angle Investors and Private Funding Investors...
...These private lenders can be found listed in a variety of real estate investor websites however, their conditions for a loan are not favorable to small investors like me and you, Robert.
Some of their unreasonable conditions are, they want:
Loans from Family, Friends, and Acquaintances
- A large percentage of the profits
- A lien on our personal house and the investment house
- Short term loan time frame with high penalties
- Appraisals, scope of work needed, etc.
- High interest rates
To name a few of their loan conditions!
Now, as a seasoned real estate investor, I have become known in my circle of friends.
The people I know personally are familiar with the quality of work I do and the fact that I complete my projects in a timely manor.
Although, borrowing money from people we know as a beginner investor, is not attractive do to the lack of a proven track record.
Now, after decades of remodeling fixer-upper houses, I know people willing to lend me money to complete small remodel projects at eight percent (8%) interest.
As an experienced investor, people offer me money because they can see that I'm a good risk with a good investor tract record.Finding Equity Loans
When bank financing and mortgage companies don't want to finance small investors like us, I'm no longer shy to bring up my investment home opportunities in casual conversation with people I personally know.
I pay a better rate of return than a bank savings account, and in many cases, eight percent interest is better than many current investment accounts.Promissory Notes
I use a Promissory Note that is just as legal and binding as a second mortgage.
You can have your Attorney prepare the document for you meeting your State specific guidelines or check in the right hand column of this page and click on "Contracts and Legal Forms"
to find a promissory note specific to your state.
I would recommend contacting people you know in your area and presenting your investment loan needs.
Check with your local real estate investor associations,
discuss your needs with your Accountant, Attorney, even your Doctor.
We often overlook the available money resources from friends, family, neighbors, or any local organization where people meet.
That's where casual conversations turn into business relationships!Don't Forget The Golf Course!
Many business deals have taken place during a friendly game of golf!Tell everyone you know Robert,
you're looking for some short term working capitol for an investment house.That's what I did,
and sure enough, working capitol for my investment homes became available, with better financing terms than any private lender would offer from an on-line investor website.
Hope this helps,