How to Use Private Money For Real Estate Investing

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It does take money to make money in real estate, but it doesn't have to be YOUR money. Learn how to use private money from individual investors to fund your own real estate investments, whether you're brand new or a long-time investor. In this video, Coach Carson shares his private money experience from the last 18 years about what private money is, how to find private money investors, and how to structure a private money real estate deal.
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TIMESTAMPS:
0:00 - What is private money?
0:52 - Why private money (borrower)
1:13 - Benefits as a borrower
4:59 - Negatives as a borrower
5:46 - Who are private lenders?
8:48 - Don't underestimate your value
10:16 - Benefits as a lender
11:53 - Example #1 - First Mortgage
15:34 - Example #2 - Second Mortgage
18:00 - Summary
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[@CoachChadCarson]

If you've found a potential private lender, here's a guide on how to ask them to partner up with you! ► kzbin.info/www/bejne/iKfam6aaZaZ7l5I

[@chriskimsey9605]

Hey coach thanks for the solid info.

[@CoachChadCarson]

Happy to do it! Thanks for watching, Chris.

[@TheEvanDanteShow]

Always providing value! Love the content man!

[@CoachChadCarson]

Appreciate it! Thanks for the comment and for watching.

[@veraherlihy5107]

Hi Chad. Thanks for posting this. I am also an investor and looking for ways to expand my portfolio and considering private money lending, so I found your video very helpful. Thanks so much and best wishes.

[@CoachChadCarson]

Glad to hear it, Vera! Thank you for the feedback, and best of luck with the next steps of your portfolio.

[@jillbowden9103]

wow this is so helpful!!

[@CoachChadCarson]

I'm so glad! Thanks for watching Jill.

[@cpinvedtmentsinc]

Greta Class Coach Carson, Bes JCP

[@emmanueluko744]

very clear presentation

[@CoachChadCarson]

Thanks for watching!

[@ankushratwani2903]

Thanks Chad. I funded my first BRRRR with private money, and doing the same with my second one!

[@CoachChadCarson]

Nice work! Thanks for sharing. Private money is perfect for that first part of a BRRRR deal.

[@ankushratwani2903]

@@CoachChadCarson One question I have always had, is what if the lien holder forclouses with the renovation not being done, and thus not meeting ARV. In the example above, if you died or something happened before finishing, the property still may be worth $150k, so would the lien holder just be able to foreclosure and get back $150k or less?

[@chadkinsley542]

Always enjoy your videos! Where are some good places to put money while building up enough savings to purchase a property as savings accounts pay NOTHING?

[@CoachChadCarson]

Thanks for watching! There isn't a great answer for you. When you need the cash in a couple of years or sooner, you don't want to put the money into higher return vehicles (stocks, private loans, real estate) because they could go up and down. So most of the time you just put in the best savings account you can find and keep saving.

[@gabrielperales8673]

So do you create an llc to put the property under? Whose name is going to be on the deed?

[@jeffroCO]

great content again. Is creative financing part of the Real Estate Start School?

[@CoachChadCarson]

As part of Real Estate Start School (now Real Estate Deal School) I have an older creative financing course (just taught by me) that gives a lot of creative financing case studies. But it's not quite as comprehensive as the new one with Dyches, which includes all the paperwork and a lot more details.

[@small_town_investing]

Hey Coach, love watching your videos. I'm a fellow Clemson Tiger (class of '10). I'd love to chat with you sometime. I bought my first rental property in August of 2020, and now (in August of 2021) I have 78 doors (2 small mobile home parks, a fourplex, a duplex, and the rest SFH's)... all with other people's money!

[@CoachChadCarson]

Hey Josh. Wow, that's been quite a year! Where are you buying most of your properties?

[@small_town_investing]

@@CoachChadCarson I’m buying them in SE Alabama which is where I live. All of our properties are within a 50 mile radius of where we live.

[@daughteroftheking7617]

@@small_town_investing hey josh! Looking to score anymore properties? If so What’s your email? 🤗

[@daughteroftheking7617]

I also want to learn how you got PM lol

[@Mrpanic1]

Hi, I’m so confused about one thing, should I add a percentage for closing costs to pay title company when borrowing money from private lender???

[@CoachChadCarson]

Yes, you should plan to pay money for title insurance with private money. I tell my lenders I treat them just like a bank and do the same precautions I would with the bank. So, title insurance protects your private lender.

[@dasfahrer8187]

Do private lenders not want to see a track record before investing with you? How do you build that up without first starting with one or more institutional/federal loans?

[@CoachChadCarson]

Good question. It always helps if you have a track record, so if you can do a house hack or something with a traditional loan first, that would certainly be easier. But you can also adjust your private lending in ways that make it less risky (and/or more rewarding) for the lender on your first deal. For example, you could reduce the loan to value ratio (i.e. putting more money down and/or buying a property at a lower price) and you could pay them a higher interest rate on the first deal (which is what I did).

[@Juandi202]

250k property for $1900/mo? Help pls

[@xfhnhhgjbvcfg]

I would never risk other people's money.

[@CoachChadCarson]

interesting. do you take more of the approach of only investing your own cash? Or do you get bank financing, too?

[@xfhnhhgjbvcfg]

@@CoachChadCarson my own cash, I'm from the school of Dave Ramsey. I'm allergic to debt. I know this won't work for everyone but it's the system I use. Can't imagine I will make out better than borrowing money from others but I definitely feel less at risk of the house of cards falling down around me and lossing everything.

[@BEZY-vk1hy]

How is $875 per month for 5-years pay the loan off at $10,500 per year? Isn't that only about $50,000ish? Not $150,000?