One of the number one questions I get asked by new investors is why would somebody pay 12% interest for a private lender loan.

The answer is that these kinds of houses cannot be purchased with a mortgage because the seller is insisting on cash.

For example a bank owned property, foreclosure, or a property that’s damaged by a hurricane or fire. You cannot buy that house with a mortgage because you can’t get insurance on it. The only way you can buy it is cash.

So when you are buying cash you need to either use your own cash and if you don’t have your own cash you’ll need to borrow from a private lender. The going rates for private lenders are anywhere from 10% to 12% or 13%.

That is why you have to pay 12% to borrow private money. I have been the private lender for many of my coaching students, and helped them achieve financial freedom through real estate investing!

If you want to learn how to create financial freedom through investing in real estate and are ready to invest in your future click the button below to learn more about our coaching programs: