We used to love using private lenders to fund our deals. Terms seemed to be more favorable and once a relationship was established we thought getting deals done would get easier.
However, there are a few hidden costs we discovered over time.
- It takes a lot of time to build up and manage a network to really have a reliable source of capital. This is time that can be better spent finding and managing more deals which is where the money is made. How much is your time worth?
- There is no guarantee that your private lenders will fund your next deal. We’ve all had it happen. You get a great deal on contract and all of your private lenders are “tapped out”. Now you’re scrambling around trying to find capital to get the deal done. Talk about a time suck.
- You have to keep robust records for tax purposes and getting all the legal and financial information done properly can really cost you. The additional costs of hiring legal and tax professionals adds up and should be factor into these “lower rates”.
When you add up all these additional costs and time spent you have to ask yourself how much more favorable are the terms your private investors are giving you?
How many deals are you missing because you’re constrained by the amount of capital you have available to you?
It’s our goal to be comparable to private money once you factor in the added value of convenience, capacity and costs. While our rates on the surface might seem slightly higher than private money, we guarantee to fund your good deals, you’ll never have to chase us down for funding and we handled all the legal and tax work for you. Again, how much is your time worth?