This month I’m trying to buy another rental property. I’ve been thinking through how to do this with 100% financing but I haven’t made the effort to look for private funding yet.
Private funding is when you get a loan from someone you know rather than getting a loan from a bank. The good thing about it is that you don’t have to deal with a bank and the stringent lending standards most banks follow. This lets you and the person lending you the money work out the details of the loan and the interest rate.
Private funding is great for the lender as that person is able to get a high interest rate on the money they lend. For instance, lending to a real estate investor at 8% interest is much better than having that money in a checking, savings, or certificate of deposit account.
But since I haven’t done the work to build up a list of people willing to invest with me, I am working on trying another method.