(article by Alan Cowgill - reposted with permission)

If you go to a bank, chances are they will want tons of paperwork, pay stubs, tax returns, etc. It's a lot of hassle. Eats up time.

Whereas, when you can move fast with all cash from private lenders, sellers will sell you their homes at a discount.

Let’s review 4 sources for your real estate funds. Look at the downsides:

1.) BANKS
- Quit your J.O.B. and they won't loan you money
- Need down payment
- Need decent credit
- Lost time (4 ˝ months to close a deal for me once)
- No relationship
- They change rules instantly
- Mountains of paperwork
- On credit report
- Provide stack of documents
- Jump through their hoops
- You're out of control
- Monthly payments
- Pre-qualifying the property

Let's face it some of us, buy some really nasty stuff! Beyond the trash and that horrible smell, some of the houses we buy don't have roofs, or windows, or furnaces, or plumbing. We buy trash and turn it into cash. Banks don't seem to understand that. I've actually had a bank refuse to loan me money on a house for 4-1/2 months because it didn't have a furnace. Gee I thought the idea of being a rehabber was to buy an ugly stinky house and fix it.

2.) HARD MONEY LENDERS
- They are very expensive
- Maybe your credit score is important
- Need down payment with some lenders
- Only one (1) exit strategy - Sell for cash
- You're out of control
- No up-front fix up money (Rehab $$$)

3.) LINE OF CREDIT
- Monthly payments
- Limited $$$
- Can be called back and you're cut off
- Out of control

4.) YOUR OWN MONEY & CREDIT CARDS
- Limited $$$
- Could make more by loaning it out (& OPM @ 12%)

Use private lenders and avoid all of these downsides!

With private money I buy what I want. I know how to rehab about anything. That's my decision, not someone else's. Today I am the approval committee.

One final note on building relationships…

I appreciate my lenders. I've met some great folks. These strong relationships built on trust make your business grow, not to mention make your life more enjoyable. Do you actually know anyone at your bank or are you just a number to them? There are some exceptions, of course. Actually, I loved my banker so much I married her.

The bottom line is that now you know the facts. Don't PROCRASTINATE like I did. Go create wealth and live the life you want!

Alan Cowgill is a speaker, author, and real estate entrepreneur. Alan has bought or sold over 200 investment properties. Alan will be the guest speaker at the September 2010 Monthly Meeting of the Connecticut Real Estate Investors Association, or CTREIA. Alan will also be teaching an all-day real estate seminar with CTREIA on October 2, 2010. For more information on these an other upcoming events, visit www.ctreia.com.

Bank approval seems to be a picture in time these days. What an investor is improved for today can change in an instance tomorrow in loan committee.

ho do you get private lenders? In Chicago area, hardmoney lenders show up when you search for private lenders.

You have to search for private sources.

I am talking about doctors,lawyers,etc. People that are very busy and want to invest passively in real estate and obtain certain ROI's.

So I would drum up cash and be the manager of the fund to acquire these properties.

Hard money lenders are a joke these days.They back load so many fees and points it sucks up any profits.

You can get private money for 8 to 9 percent if they deal you are acquiring has great upside.

Very strange It is too difficult to get some loan any where because you have no relation or relative there.

http://www.bayut.com

Be sure to have a loan in Credit Lending Comapany who has low interest.

For those who are not aware...Be careful when shopping for loans. Keep the number of credit pulls to a minimum. Too many credit inquiries can pull your score down.