REI WEALTH MONTHLY Issue 31 - Page 9

PRIVATE LENDING BRUCE E. DINGER RISKS VS. REWARDS Sitting in Bank Real Estate Private Lending $100,000 x 1% interest $100,000 x 10% interest 12 Month Term = $1,000 ROI 12 Month Term = $10,000 ROI *Backed by Real Estate Private Lending PML are making a 10x greater return on their money! Stock Market Real Estate Private Lending Completely Unsecured Secured by Deed of Trust or Mortgage Deed Completely Uninsured Collateral is Fully Insured Invest at Market Price Collateralized Below Market Value Returns Are Unknown Returns Are Fixed and Agreed Upon Term Tangible Asset HOW PRIVATE MONEY HELPS YOU AS A RESIDENTIAL REDEVELOPER (RR) Private money lenders bring speed and efficiency to the RR’s transactions, and their leverage is far greater when they purchase using private cash funds. Many of the homes RR purchase are in need of a quick sale within 10-14 days. A traditional bank requires 30-45 days to close a loan. Many traditional home sales fall out of contract because of financing issues. Using quick cash as leverage allows the RR to negotiate a much lower purchase price and reduce risk. Being able to offer a fast closing with private funds motivates sellers to take the RR’s offer over the competition, and entices them to take a much lower price than they would from a conventional buyer. Also, lending guidelines are also continually changing and are requiring applications, approvals, junk fees and strict