case studies
D. 3 Primary Financing Types for Real Estate and Their Cost!

There are 3 Primary Types of Financing for residential real estate deals:   Banks, Hard Money Lenders and Private Money Lenders.  This video discusses the Pros and Cons of each one, who should use which method, and most important of all:  how to calculate the cost of each financing type so that you don’t take on financing you can’t afford!  (This is important because that can make or break your deal!)  Watch this short video!

                   

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Comments (17 comments so far)


  1. Fredrick Austin

    Daniil, thanks once again information. Knowing what great ways to fund our deals isvery helpful!


  2. Glenn E. Fleming

    Hey Daniil. As usual, awesome lesson and we appreciate your “big picture” approach before “delving deeper” with regard to the introduction of new concepts/terminology. Thank you again for always providing real-life scenarios and examples with your Rehabvaluator software presentations! One hypothetical scenario w/ question: I successfully obtain a private money loan for a rehab with the plan to rent to a tenant (or live in the property myself) but I am unable to refinance with a conventional bank loan at the end of the rehab (due to the usual…credit, no collateral or no cash in the bank, etc). Is there any other option besides being forced to sell the property to a motivated buyer/investor?

    Thanks,

    Glenn


    • JacobC

      Hi Glenn,

      First, you might try renegotiating with your private money lender. See if they’ll do a long term hold or possibly do a rent/profit split with you (you could rent the property, split the rents, and then split the profit when you sell the property in whatever time frame you agree on). Alternately, you could do the same thing with another private lender/JV partner. Offer them the same deal of either straight interest or a rent/profit split with a preset holding period so you can pay off the original lien holder. If none of those options work and you have to get that original loan paid off you’ll probably need to sell. One thing to consider though is that if it’s a good deal when you sell you should make some cash. You could use that to help you get a loan for another property or make a sizable down payment on your own house.

  3. Great evaluator and keeping track of accurate records on all your transactions or deals.

  4. Excellent tool to structure your deals with accurate records on how much you make on each transaction or deal


  5. Pat Ncube

    Great information Daniil.


    • Daniil

      Thanks, Pat!

  6. Great content, I’m a Premium Rehab Valutor client and this software has given me major creditablity and every investor that has seen my marketing packets have been very impressed. Thank you Daniel!!!!

  7. It’s Great!!!


  8. Kevin Decker

    It is amazing to see the comparison of the different types of loans. I never realized the savings to be made by using a private money lender. Great job in breaking it down for us!!


  9. Fumei Loh

    I need short term financing for two years or so. Do you provide any information for it?


    • Daniil

      All the education we provide is on this site. Including this content on the page here!

  10. Thanks Daniil, very informative, I look forward to to next video


    • Daniil

      You’re welcome, Andy! FYI – you can access the rest of the videos via the menu at the top also!

  11. I don’t have a website but really liked your financing video. It was very helpful in determining costs so I won’t lose money. Thanks. Harry

  12. I really learned a lot about financial costs. Thanks. Harry


  13. Shirley

    Thank you, Daniil! The Rehab Valuator appears to make it easy to compare the sources of financing one’s real estate investments. I was impressed by the structuring of private money financing, especially with the personally suggested offer of the interest rate that hopefully would be acceptable to a private lender.
    I will have to do much practice to become comfortable with the numbers crunching; your demonstration makes it sound and look easy to duplicate. Thank you again!