You see those shows on television where people buy properties in really bad shape and make them look absolutely marvelous for resale, but have you stopped to consider where these rehabbers are getting their funds? You may be surprised to discover that a lot of the guys doing the flipping are doing it on a borrowed dime and it is actually private cash and hard money investors that back their real estate investment endeavors.
A private cash investor is usually a person that is smart about money, financially sound and realizes that investing in traditional stocks doesn’t have the same return as investing in short term real estate investments. Although they may not know much about real estate investing itself, private cash investors understand that the return on such an investment is going to be beyond the average 4-9% seen on the stock market. Most real estate investments see returns in the 15-25% range.
For this reason, there are a lot of real estate investors that partner with private cash investors and together they generate profits from rehabbing and wholesaling real estate. Unfortunately, private cash investors don’t usually walk around with a sign saying “ask me for money”. Most private cash investors work closely with real estate investors who specialize in rehab properties and most rehabbers work closely with distressed property solution providers that are able to purchase properties at below market value.
This is a win-win situation that allows private cash investors to put their money in a high yield situation with a real estate investor they trust and at the same time the real estate investor is working with a distressed property solution provider to offer alternative financing solutions to homeowners in need. Needless to say, the easiest job is reserved for the private cash investor as the real estate investor or rehabber will doing all the physical work coordination and the distressed property solution provider will be handling all the paper pushing, finding of properties and negotiating with property owners.
If you have money to invest and are looking for an option that offers a higher return on your investment, then you should consider becoming a private cash investor and working closely with real estate investors and distressed property solution providers to earn your next profits.