Weekly Gold Fax 2007-31In this month's newsletter I spent a little time talking about Private Money Partners. I've heard a lot of horror stories recently from subscribers about poor business practices in this regard.
Most of these could have been avoided with a little bit of pre-planning and time. Almost all of these problems were a result of being in too big of a hurry (or being rushed)!
Which got me to thinking...?
If you go to a Bank to get a Line of Credit they are going to ask for security (unless of course you are very savvy). A Home Equity Loan is a prime example of this. This is a very easy loan to obtain. It utilizes the equity in your home for borrowing purposes and is super easy to access... often only requiring you to write a check.
Side Note: Be very cautious and conservative in using the equity in your home as security for speculative ventures or consumer items. These can put your home at risk and that's not smart.
What could be very smart is for you to use equity in your free and clear properties to secure a Private Line of Credit with a Private Money Partner. This accomplishes two key things.
1. You can properly secure your Private Money Partner one time... and use this equity over and over again. Appraisals, Title Work, Closings, etc. only need to be done once also saving you additional money. Then... when you need the money quickly... you are in a position to access it with full protection of your Private Money Partner.
2. This also acts to protect your equity in a free and clear property which might otherwise be naked to the world. Any liens, judgments or frivolous lawsuits would be inferior to your Private Money Partner's position. If you develop a good working relationship with a Private Money Partner they will also become a financial friend and help you should the need arise. This is just good business.
This also shows you are a professional which breeds confidence. There are lots of benefits all the way around. Plus... many variations on this theme!
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