How to Raise Money for Real Estate Deals

Posted on April 20, 2009 by IC N in Finance
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The low LTV approach is very safe compared to that taken by conventional lenders who routinely lend 80-95% LTV, often leaving no wiggle room should the borrower default on making the payments. This is part of the reason banks are struggling right now.

You, as a private lender, will never lend more than 70% LTV which is a very conservative number aimed at providing a cushion to work under. As a lender, it is in your best interest to minimize risk and maximize return and this is why a loan should never be made without a 25% safety net. We don’t violate this rule, because your security is at stake.

Determine the value – Typically the value is determined with comparable sales, DOM (days on market) and now how many in the area our foreclosures. A BPO (Broker Price Opinion) may be ordered over an appraisal because it’s cheaper and faster. It never hurts to get a second opinion.

If you would like more information along with some free tools to help you get started raising private money head over to