Tim Bell funding your deals 11

Now let's go over the characteristics of private lenders and then we'll be finished with private lenders. A private lender is, as it says here, typically a private individual. It's not a company of any kind. Typically, they are not licensed as a lender. Why? Because if they're licensed as a lender, they don't qualify as a private lender. They're a professional lender. They're a hard money lender. Okay? Terms are negotiable with your private lender. They will negotiate with you. Again, anything better than what they're getting right now could be tremendous for them. Okay. They're okay with non owner occupied properties. Again, that is your proposal to them. That's what you're suggesting they do. They're okay with rundown, beat up, nasty, ugly and stinky. Again, that is your proposal to them. That's what you're expressing to them that you're going to do. Typically, they're going to charge you somewhere between two and and some other interest rate, usually simple annualized interest. Again, with private lenders, I recommend you keep the interest calculation as simple as possible. Unless they suggest something more complex. You'll listen, remember, flexibility is your new middle name. Okay? They don't charge you any points. My private lenders don't know about points and I'm not going to share it with them. And I don't recommend you do either. Don't mention it. Now, if they bring it up, you would consider it, but most of the time they won't even know what points are. And I'm not going to tell them. And I don't recommend you do either. Okay? There are no additional fees for working with a private lender. They don't have any overhead. Okay. They don't have offices and secretaries and computers and all that stuff. Overhead. So they don't need to charge you any additional fees. They may fund your entire deal. Remember my lady from St. Louis, I told you she had a hard money lender that's going to own her 80%? Well, when she found those three private lenders, she combined all their money together and then she didn't need the hard money lender anymore and she got the money at much more favorable terms. So if you ask, they may loan you all the money you need for the deal. So ask. Okay. They may or may not require monthly payments. Some private lenders require monthly payments to pay their bills, others don't. Okay. Again, you can negotiate that with them. Approval is based largely on the deal. They want to see the numbers on the deal, just like the hard money lender does and also has something to do with your relationship with them. Okay? They have to have some level of trust with you. There's no hoops to jump through. There's no forms to fill out. They're not going to make you fill out an application or anything. They're not a professional lender, okay? Secured by either a lien position, as we talked about, or a partnership agreement. Now, a partnership agreement is where people come together. The partnership owns the property, typically, and the one person puts in the money, the other person puts in the property or work on the property and things like that. Now, generally speaking with private lenders, I recommend against having a partnership agreement with them. Okay? You're much better off if you have a simple lien position with them. That's a better choice for you. However, there is an exception. Okay? One of the exceptions is if they are an experienced investor, they may be able to give you some positive and helpful input into managing your deal. You might want to consider a partnership with that person, but that would be the only one. Okay? Now, occasionally you're going to get a private lender that wants a partnership with you. Of course, you'll consider that. You're open to everything. You're flexible. Okay? The last one, they're very reluctant to foreclose on you if you don't perform. Okay? They don't want to foreclose in many cases. They will just give you extra time as you need it. So. So that's basically how private lenders work. And again, they're the greatest thing ever. I strongly recommend that private lenders can be a great thing for you.