Lenders want to see your own money going towards your projects through personal investments.
In real estate investing, leverage comes from using other people’s money to generate wealth and income.
The better your leverage, the easier and more profitable real estate investing becomes.
But how do you find the right loans that can give you that leverage?
One of the things lenders look for is whether or not you’re personally invested in what you’re asking them to put money into.
Use Personal Investments to Demonstrate Commitment
If you’re also investing your own money in your project, lenders know you’re serious about the job.
Using other people’s money (OPM) also demonstrates that your friends and family are willing to invest in your project. Lenders like to see you have skin in the game, even if it’s as simple as borrowing from a line of credit.
Especially if you’re a newer investor, the less you ask of lenders and the more at risk you take on, the more lenders will be attracted to you.
Personal investments demonstrate your commitment to follow through and finish a project — just what lenders are looking for!
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