While many recent news headlines have continued to herald the ‘woes’ of the housing market, the real figures in many areas of the country actually very promising. Though, what is most important to note for real estate investing companies is that in many areas up to 65% of all buyers are paying cash!
That means that 65% of all home buyers out there are potential candidates for becoming private mortgage lenders for your real estate investing business. OK, in fairness some may not be the best candidates and could be using the last of their reserves to buy a new residence and taking advantage of the low prices. However, there is a big percentage of this group that either have significant additional idle cash on hand, are actively looking for other investments or could simply be better off lending their money on multiple properties for truly passive income instead of one that will require active management and marketing. The problem is that many of these cash rich buyers may not know about private mortgage lending or just haven’t been asked.
Think about it this way; are you better off selling one property to a cash buyer for $250,000 or being able to use that cash so that your real estate investing business can acquire 5 new wholesale deals with larger profit margins?
So how can you help them make the leap? The first place to start is to draft out a solid system for private mortgage lending in your real estate investing business if you don’t have one already. Then create the appropriate marketing/ informational materials and start getting them in front of all of your potential buyers as well as to all related industry professionals that refer you business. After all if they can turn each of their transactions into 4 more too they have a lot to profit from.
