Finding Your Investment Money
Finding investment money is always has been, and always will be the toughest task for
real estate investing. You can help solve this problem for yourself and others by acting as a Real Estate Loan Finder.
what does a Real Estate Loan Finder do? A Loan Finder:
- Finds loans for to buy income real estate.
- Brings a borrower and a lender together and steps back.
- Earns a fee from the borrower for finding the needed money.
- Is paid the fee AFTER the loan is completed and the borrower has the funds.
During the process of finding money for others for a fee, you as the finder,
will learn a lot, such as:
Which lending organizations (banks, mortgage companies, private individuals, or others) are making real estate loans? What types of loans each lender prefers, including loan amount, ' term, purpose, and so forth.
Where a prospective borrower will most likely get the loan he/she seeks for their income real estate.
Why a borrower will be accepted for a specific loan type, and why a borrower will be rejected for another type of loan.
How to best present a real estate loan application to each lender you deal with.
To set yourself up as a real estate loan finder you take these five simple steps:
1. Choose a name for your business. If you operate under your own name, you¡ªin general¡ªdo not need to register your business with your County Clerk. However, you MUST check with that person or a competent local attorney to learn what the local rules are so you can comply with them.
2. Learn as much as you can about the finding business. In essence, you act as a middle person to bring a borrower and lender
together. You then step back and let them negotiate and handle the paperwork.
3. Advertise your services as a loan finder in local papers, after you have complied with local business registration rules and have had the advice of a qualified business attorney.
4. Watch for responses from local banks or mortgage companies. Many times they will offer to make you their local Loan
Correspondent to find mortgage applicants for the bank or mortgage company. You serve as an Independent Contractor working under the lender's real estate license.
5. Find clients. Negotiate loans for them. Collect your fee on completion and go on to the next deal. Meanwhile¡ªof course¡ªyou'll get to know who's lending locally, and for what types of deals. You can then structure your deals to comply with the going lending practices. When you serve as a Loan Correspondent, the lender typically pays you 40 percent of the fee earned for the loan. The lender keeps the remainder of the fee earned.
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