Renegotiate Private Money and Save Over $5,000 a Year In Interest

With current 5 year CD rates at 2.94%, and dropping, one of the things we’ve been doing is replacing a lot of our private lenders that are at 10, 12 and 15% interest rates with MUCH lower rates. Just think about how much money you, as the real estate investor and holder of the property, could save if you replaced all your 12% money with let’s just say 7%. That’s a 5% savings each year and on just a $100k home that is a $5,000 savings. So, how exactly do you go about it?

Begin Setting the Stage

When you send your private lenders their monthly or quarterly statements put in a little blurb about their current rate and compare it to other rates. (check out: http://www.bankrate.com for current 5 year CD rates)  This keeps them updated and shows them what a great deal they are getting from you.  Reinforcing the great decision they made to invest with you.

Let Them Know It’s Coming

In conversations with your lenders make sure you mention that replacing higher interest rate money is something that you’re currently doing. Casually interject into the conversation that you’re currently one of the best investments in town at 7% interest, secured by real estate. Keep things positive, but be confident in the fact that what you’re offering is a good thing for them.

Share Your Private Money Program Weekly

As you’re talking to and meeting with new potential lenders you can show them your private money lending program, give them your presentation and show them your current rates which are WAY more than what they will get anywhere else. Plus, investing with you they get the security instrument of a mortgage/deed of trust.

If you set a goal to meet with 2-3 potential lenders a week and share your private lender program with them then before long you will have an unlimited supply of people to offer investing opportunities to.  When you have a lot of private money lenders to choose from it’s much easier to negotiate terms that are more to your liking.  It’s a great feeling to know that whenever you get a great real estate deal you can choose from a list of potential private money lenders to call rather than having to rely on high interest rate, high points hard money lenders.

Private Money Lenders Beat Hard Money Lenders Hands Down

Don’t get too carried away with renegotiating that you lose a private money lender.  Save your best lenders for last. I still have several lenders that I’m paying REALLY high rates. However, they have a lot of money, they’ve repeatedly loaned me that money, they’ve referred me to other potential lenders, and they are the kind of people that I want to keep happy. I’ve not yet replaced their money with lower interest rates because I don’t want them to put it elsewhere.

So, weigh the pros and cons, but don’t be afraid to start saving $ 5,000 or more a year!

About the Author:

Cortney Jones is a veteran real estate investor, performance coach and licensed broker that has been creatively buying and selling real estate since 1992. Cortney is the co-author of The Ultimate Private Money Solution, a comprehensive program which lays out the step-by-step instructions for acquiring all the private money you will ever need to fund your real estate deals.

Cortney and her partner, Mike Moulton, keep real estate investors informed, up to date and educated at, http://www.TheSharpInvestor.com, a blog that educates investors on cutting edge investing techniques that are working in today's market. Mike and Cortney are both actively investing today so they keep their pulse on the market and bring you tips, tricks and techniques to help your investing "stay sharp." 

Areas of expertise include: subject-to, wholesaling, wholetailing, rehabs, short sales, foreclosures, pre-foreclosures, lease options, rent to own, systems and processes, marketing and private money.

Download a FREE 48 minute call on finding all the private money you'll ever need for all your real estate deals at:http://www.ultimateprivatemoneysolution.com