Private Money Lenders — Friends and Family Should Be Your Second Choice

June 15, 2017

Here at Palm Desert Capital we pride ourselves on being one of the most popular and easily accessible private lenders in the area, so we want to provide you with a short guide on how you can intelligently raise funds to become a real estate investor.

Recently, in our last post on hard money loans and real estate investing, we talked about how Palm Desert Capital can benefit anyone who’s interested in flipping a house.

Now, this post is even more important. It’s the #1 problem we see new real estate investors make: They focus too much on the minutiae of the deal and not enough on where they’re going to find the money to make that deal.

You might find a great house listed for $250k that you know is worth at least half a million, but you don’t have enough money on hand to make a down payment. Still, you know it’s a sure thing. Someone had to sell in a down market and now another real estate investor will snatch that house up if you don’t act fast.

Where are you going to get that money?

Private lenders.

Of course your first option is to ask your friends and family, but that might not work out well. I’m going to put this in all caps because, really, I might as well be yelling it: BEFORE YOU TAKE MONEY FROM YOUR FRIENDS AND FAMILY, MAKE SURE YOU EXPLAIN THE RISKS AND POTENTIAL DOWNSIDE!

Otherwise, it’s more than money on the line; you’re risking your relationships — with the most important people in your life, no less.

Plus, even if your friends and family are on board with the investment, it’s fairly unlikely they have that kind of liquid capital. If they do, though, this is a viable option.

Your second option is us, Palm Desert Capital. Even though you’ll end up paying more in fees by going with us (I’m not going to lie: that’s how we make money), you’ll actually be risking less.

Life isn’t all about the numbers.

Now, that doesn’t mean that borrowing money from friends and family is ALWAYS a bad idea. I’m not saying that by any means.

Keep in mind that I run a HML business, so I’m a little biased. Still, I firmly believe that, if you’re smart, it’s better to be independent. Don’t rely on your friends and family; you’re mixing two things that should be kept separate.

Interested in Flipping Houses? Hard Money Loans Is Your Answer

June 12, 2017

Hard money loans can give you the money that you need in order to get off your feet as a real estate investor.

Check out some of our videos:

In these two videos, we take you through the before and after stages of flipping real estate (in this case, giving the house a “cosmetic” —  painting, landscaping, etc).

If you’re looking to get involved in flipping real estate but lack the necessary capital, contact us at 760-469-4650. We can help you.

At Palm Desert Capital, we specialize in hard money loans.

How Does a Hard Money Loan Work?

A hard money loan is a short-term loan secured by real estate. They are funded by private investors (us) as opposed to conventional lenders, such as banks or credit unions.

In other words, hard money loans cut through red tape.

We can give you money based on the value of your property, not your credit score. Even more importantly, we’ll value your house based on its ARV, or “after-repair value,” after you make the renovations.

Also, rather than having to wait a month or more for a loan from the bank, we can usually give you money within a week.

So, what’s the catch?

You don’t want to use a hard money loan for a long-term investment, because we can’t beat the interest rates that the bank provides. HMLs are, by definition, short-term lending instruments.

However, if you’re flipping houses, that doesn’t matter. We should be your go-to. You aren’t going to spend two years flipping a house (or at least you shouldn’t be). In order to make money investing in real estate, you need to be smart and savvy.

Here at Palm Desert Capital, we have a saying: As long as you know value, you’ll never lose money.

So make sure you know the value of the home you want to invest in.

First TD at 10% LTV

March 23, 2017

Yes, 10% LTV, 90% equity position.  A Real Estate Broker from Orange County had a client that needed to pull some funds out of their investment property while the property was being listed.  A private money loan was funded in 5 days;  the agent looked like a hero, the seller gets some cash now while the agent works their magic and a client for Palm Desert Capital receives a return of 10%, while having excellent security. (There was a four month minimum in interest collected).

PDC is here to help.

12% Return?

February 24, 2017

A first trust deed was funded this week on a Yorba Linda property.  The investor received 12% interest on a first trust deed, and of course it was a non owner occupied loan.  The loan was funded and there was a guaranteed 4 months collected interest.  Palm Desert Capital’s extensive due diligence has been paying off, we have not had to “take back ” a property yet.

Because we are not a huge high volume operation, we don’t need to do loans to keep the lights on.  This is often overlooked by investors.

We are here; 760-469-4650

 

 

 

Funded Again!!

February 23, 2017

Palm Desert Capital, funded another private money loan where the seller was able to make huge profits.  The dilapidated three unit was an eye sore for many years and bank financing could not be done.  Palm Desert Capital funded a hard money loan; no questions just based on equity.  Making the improvements the investor was able to renovate the building and sell it for a 100k profit.

If you need money or advice on buying and selling real estate, contact Palm Desert Capital.

760-469-4650