For the past several years, the economy has been stagnant due partly to the crash of the real estate market and the ensuing mortgage crisis. Currently, there is an abundance of vacant and distressed homes throughout the country that are of interest to the savvy investor. However, the ill effects of the lending crisis make it extremely difficult for credit worthy investors to acquire these properties in order to renovate and reposition them for profit. Although the stringent lending criteria of the financial institutions are playing a huge role in keeping the American economy in turmoil, there is a solution. The state of the housing market, and to a certain degree the economy as a whole, will recover through the efforts of the individual investor.
There is an abundance of distressed and dilapidated properties that need to be renovated and repositioned for sale or rent all across the country. Many active entrepreneurs are pursuing these opportunities, but find a lack of financing sources. This is where the individual investor, serving as a private lender, could profit handsomely.
Individuals that choose to actively invest their money into the marketplace, as opposed to leaving their capital sitting idle in a savings account, or IRA, can help to rebuild and stimulate the economy. Specifically, individuals who choose to become private lenders and invest with professionals provide a much needed source of funding and a shot in the arm to the real estate market.
Private Lenders generally have more flexible lending criteria as the investment vehicle (real property) will be the primary collateral for the loan. Experienced real estate investors simply need to borrow the funds to acquire a property, reposition the property for profit, and pay the private lender back with interest. The paperwork is minuscule compared to that of a bank or financial institution and the speed of the transaction helps the entrepreneur to complete the transition of the property quickly, thus helping to stabilize the economy.
Part of the mortgage crisis stems from large, national and multi-national corporations investing in housing in areas in which they were not experienced. It generally is not a good idea to invest in real estate, or any other investment vehicle, if you do not understand the investment opportunity. Private lenders help to eradicate the ills caused by the large banks and financial institutions, by directly investing with local investors who are acquiring distressed property in their marketplace. The Private Lenders have an extra level of security because they are familiar with the neighborhoods in which they are investing.
Overall, there is much that needs to be done in order to stabilize the real estate markets. However, there is a huge opportunity for savvy individuals to become Private Lenders and profit by helping professionals acquire distressed property at a huge discount and reposition those properties for profit and in turn help revive the communities by reducing the number of dilapidated properties in the neighborhoods.
David Scheuring is President of Pembroke Property Solutions, Inc., a professional real estate investment organization. More information is available at www.privatemortgagenow.com. Please send any comments or requests for more information to: info@privatemortgagesnow.com
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