Using Private Money for Short Sales

short sale double closesTalk of a double-dip is making many investors nervous. When investors get nervous they pull their money out of stocks and move them into more liquid assets.

According to “Money and Markets” reporter, Mike Larson, the poor economy is pulling the housing market back into a double dip recession. Larson’s bottom line is now is the time to get rid of housing-related stocks, and to invest in short sales.

If you are investing in short sales, it is your job to convince potential money partners that now is a great time to invest in short sales. There are two ways those with cash on the side-lines can get involved: become a private money lender or become a cash buyer and hold properties for cash flow and long term gain.

Many private investors will see a 1% return per month, or part of a month on money lent short term as a great return. A hard money lender does lending as a business and for the risk involved would expect 2 or 3% for transactional funds, and may ask for points in addition.

For those who want to rehab and sell at retail it is difficult to find transactional funding for the three to six months it might take to flip a short sale to a retail end Buyer. When more time is needed to complete the flip, private money is essential, and private money will cost less than hard money.

Convince private investors with the benefits of short sale lending. The money is not out for long. The loan is also secured with something tangible-the property. If you fail to close with a new buyer, the Lender gets the house and can resell it or rent it out. The money is freed up quickly and can be put to use again and again for short term flips.

The other way private money can be put to use in this economy is by buying wholesale property for long term appreciation and cash flow. Cash buyers who acquire at wholesale prices and then hold for cash flow through rentals and long term appreciation understand that having real estate in the portfolio is a key to wealth building. Even faced with the threat of a double dip, those prepared to hold long term are still buying near the market trough and will gain long term.

The short sale market is relatively recession and inflation-proof. Convincing private money investors and cash buyers of this will be the key to long term success for many short sale specialists.

There are tons of ways to make money in real estate, but all of them are useless unless you have a steady flow of motivated sellers and qualified buyers coming into your business. When you have a solid pipeline of prospects, you pick and choose the best of the best and finally take control of your financial future. Find out the most effective ways to get your real estate investing business roaring and turn it into an absolute cash engine. Sign up right now to get a my free 5-day “Uncover the Money” mini-course designed to give your business an immediate boost! Go to to claim yours now!

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