tom-beaty.com views on real estate

Like many real estate investors, I started out investing in real estate using my own money and credit. This worked fine for the first few deals. But eventually, as I purchased 20 to 30 properties, my lender at the time, Washington Mutual, cut me off from further deals and my personal funds dried up. I had built up a great deal of real estate equity, but was locked out from doing other deals with my traditional lender and could barely pay for my own groceries.

I had to find another way to fund real estate deals or my investing career was over.

This is when I discovered private lenders who have funds to lend for real estate deals, but do not want the headaches and paperwork to actually manage tenants or properties. These individuals are generally middle class people, like you and me, who have some extra funds to lend. They can be retired business people, corporate executives, professionals such as doctors, lawyers, or business owners or even blue collar workers all looking for returns substantially above the 3%25 to 5%25 they get at the banks.

Let me first explain my definition of “Private Money”. Private money is funding that comes from private individuals, friends, family, IRA’s or any source other than institutional or conventional means. It is sometimes referred to as “Hard Money” or “Flash Cash.”

The question I had to figure out was, “How do I find enough of these folks to run an active real estate business buying 2 to 4 houses per month?” To address this issue, I developed a marketing plan that would allow these individuals to call me and raise their hand to indicate their interest in our lending program.

How Do I find Private Lenders?

Well, frankly, we advertise for them. It’s as simple as that! Finding private money is not nearly as difficult as people think. My simple marketing plan includes many of the following activities:

Network with everyone you know and develop a 60 second “Elevator Speech”: “Are you getting a safe 9 to 12%25 return on your idle cash or retirement funds? No! Well, we buy houses and pay cash for each house and we use private lenders to fund our deals. We pay 9%25 to 12%25 on notes secured by local real estate. If you are not getting that type of predicable return on your money, I’ll be glad to get you the details. We occasionally hold a free small luncheon for potential investors, or I could also sit down with you at your convenience and show you how it works. If you like what you hear, simply let me know how much you’re looking to invest and how long you can have your funds tied up. I’ll put you on my list and look for an investment opportunity that meets your needs. When I find one, I will call you. At that time you can pass or play. There’s no obligation.”

Newspaper Ads such as Private Money Needed, Earn 14%25 plus 5 points, Rental, 70%25 LTV $65,000 call xxx-xxx-xxxx or Mortgage Note for Sale: $190,000 1st mortgage at 9%25 with low LTV. Call xxx-xxx-xxxx

REIA Newsletter and CraigList Ad:PRIVATE LENDERS NEEDED - Earn 9%25 to 12%25 hassle free on your idle cash or retirement funds secured by local real estate. I’m a professional real estate investor with over 50 successful transactions completed since 1999. I am not a financial planner, but a full-time buyer and seller of single family homes. We use private funds to pay cash for our real estate purchases and can pay you 9%25 to 12%25 when you help us fund our purchases.

To learn more visit us at www.xxxxxxxxx.com or call me at xxx-xxx-xxxx. Invest by xxxx 31, 200x and earn a $1,000 bonus.

Flyers, Postcards, and Speeches/Presentations: We also use flyers and postcards with a similar message using the above examples. Also, one of the best ways to get private lenders is to speak or present to groups. Senior citizen groups are always looking for presenters to attend their meetings and these people quite often have excess cash in CD’s or IRA’s that make them a natural lender.

Having private capital resources is critical to the success of the serious creative real estate entrepreneur. Even if you desire to use your own money, it never hurts to have another source or two available. If your funds are tied up, and a great deal comes along, you can immediately jump on it.

If you follow some or all of the above marketing suggestions, you will have people with money seeking you out to lend you money for your next deal.

Mike Lautensack is a real estate entrepreneur and the creator of the Private Lender PowerPoint Presentation Kit. This kit is loaded with tools and techniques to attract a stream of private investors. To learn more about this powerful step-by-step kit go to http://www.RealEstateWealthToday.com.

The Top 25 Housing Predictor U.S. Market Forecast for 2007 shows a growing trend of local real estate markets that are stabilizing with thirteen states represented in the annual forecast. Housing Predictor is an information driven website, providing independent local housing market forecasts for all 50 U.S. States.

Battling back from the headlines New Orleans, Louisiana is Housing Predictor’s # 1 pick to appreciate the most in 2007. Despite the loss of nearly half of its residents, the Big Easy has a booming real estate market that is growing almost daily and is forecast to appreciate 8.4%25 in 2007.

The fixer-upper has become the new major commodity in New Orleans real estate as investors move into the market to repair homes and apartments damaged in the wake of Hurricane Katrina more than at any other time in a natural disaster in the U.S. More than 150,000 homes were damaged or destroyed by Katrina, which hit in August of 2005.

The spirt of the people in New Orleans is becoming less tarnished in the aftermath of the storm. New Orleans has always had a spirit of revelry and showmanship, especially during Mardi Gras. It may have also been given a boost in the form of the New Orleans Saints NFL football team, which has had its best season in years.

Houston, Texas, a city which has been besieged by scandals with Enron and other companies is transforming into a strong real estate market for the first time in more than a decade. Houston is forecast by Housing Predictor to appreciate 7.3%25 in 2007 to place second in the forecast.

The nation’s southern states are under going the largest growth in history as a migration from colder northern states to the sun-belt quietly reaches near fever pitch. Arkansas, Alabama, Texas and Tennessee are adding more new residents than ever before. Little Rock, which was once a slumbering community has more new businesses moving into the area than ever and will hit 7.0%25 in home appreciation in 2007, according to Housing Predictor.

Nashville, Tennessee, recognized as the Music City is playing on its own good fortunes as a growing metropolitan area, which along with Odessa, Texas has some of the most affordable housing in the nation and will both hit 6.9%25 in appreciation by year’s end.

The Top 25 markets represent slightly more than a quarter of the nation’s states. All 13 states have local real estate markets that are appreciating strongly.

In the west, Washington state and Utah have real estate markets that are showing appreciation, which demonstrates how real estate unlike other investments is effected by local regional market economic and political factors.

In Albuquerque, New Mexico the sales of homes and condos had slowed for a few months only to pick back up again as more and more new employers moved to the area. Albuquerque is a growing urban center, which is forecast to appreciate another 6.5%25 in 2007.

But of all the places that made the annual Top 25 markets list Brownsville and Austin, Texas are two of the strongest U.S. real estate markets. Just a few short years ago after a high tech boom went bust Austin lost population, but a renewed economy and more computer companies moving into the area have pushed the city into a booming economy again and it will score a forecasted 6.1%25 in appreciation in 2007. Brownsville, which is in seventh place on the list is perhaps the best place to find the least expensive housing in an urban center in the U.S.

Mike Colpitts is the Editor of Housing Predictor, which forecasts future housing markets in all 50 U.S. States. To see the entire list of the Top 25 Real Estate Markets for 2007 in the nation, and get the latest on more than 250 local markets visit http://www.housingpredictor.com