If you’re thinking of selling your undervalued home or have sought out investors to renovate your property, you may have heard the term “private lending.” But what exactly does it mean?
What is a private money loan?
A private money loan is a loan you, as the homeowner, give to a real estate investor secured by the home you own. Private money investors are actually given a first or second mortgage to secure the investment they are making in your property. The investor would then purchase and remodel the home while you, the owner, can collect the high interest rates tied to the loan. Sounds simple, right?
To simplify the concept of private money loans even more, you’re basically becoming the bank. You’re loaning your real estate and sitting back to collect the valuable interest payments from your motivated investor. It’s an excellent way for a homeowner to generate an income stream while avoiding the risk that comes with other income-generating real estate transactions.
But how does it work?
This likely sounds like a great deal for almost any homeowner looking to sell their property fast, so how does it work? Investors, like us here at Romriell Investment Company LLC, will seek out an undervalued property we think would make an excellent investment and generate higher returns with a quality remodel.
Once we establish a relationship with a homeowner and they approve the purchase, we borrow the funds from the owner through the equity in the home and begin the process of renovating the property. Typically, renovations take roughly three to six months, depending on the size of the project and home, and then we will list and sell your property.
Once your house is sold, you’ll receive the principle investment of the loan plus an eight percent interest payment. It’s really that simple for the homeowner, and it results in not only a quick sale but a swift profit for the homeowner.
Why private lending?
What makes you or your home perfect for working with an investor like Romriell Investment Company through private lending? First of all, if you’re trying to sell your home fast you’ll instantly protect your equity while also securing your future home sale. You’re cutting out the expense of a middle man like a real estate agent or broker. No loan fees. No mortgage broker fees. No real estate agent commissions.
Secondly, you’ll benefit from the security that comes with working with an investor who will be able to offer buyers a fully renovated home at or below the value of similar homes in your neighborhood. Romriell Investment Company won’t work with homeowners unless the relationship, numbers and opportunity for both parties are completely in sync.
Ultimately, for homeowners that need to sell their home fast and don’t have the luxury to sit on a property or do renovations themselves, Romriell Invesmtment Company offers the perfect solution. Because the analysis on the opportunity is done long before entering into a deal with a homeowner, the owner gets an expected return with little risk. It’s the win-win kind of situation that isn’t typical in conventional real estate transactions.