Unless you've got a few thousand dollars worth of excess cash, you will probably need to find a way to fund your real estate investment projects. There are a few ways to do this. It is important to know your financing options in order to determine which will work best for your unique situation.

Conventional Financing –This is your run-of-the-mill, standard fixed-rate loan that you get from a bank. The problem with these is that they require a lot of paperwork, qualifying, and therefore time. Not ideal for the investor.

Hard Money – Hard money loans are short-term, high-interest loans in which the loan is secured by the value of the property. The borrower's credit score is usually not a factor, and are considered low risk to the lender due to the low loan-to-value ratio.

Creative Financing – The term "creative financing" refers to any type of financing which requires no money down. This includes subject to, lease options, and owner financing.

Private Lenders – These individuals have money that they are able to lend with the intent on making a profit on their investment. The advantage of private lending is that you are able to custom fit an agreement to meet both your needs and theirs

We're here to discuss the last option. I'll show you how to find a private lender and tell you why this is a trick you'll want to have up your sleeve.

As with many things, you may want to start looking in your local REIA for people who are willing to be a private lender. This is where great networking comes into play. It's all about who you know. Someone may know another investor or business owner with excess cash, which they want to invest. If you have a website, advertise on there as well.

Once you find a group of potential lenders, set up a meeting with them to discuss your plans and how you can put their money to work for them. After all, the reason they are interested in lending to you in the first place is because you can offer them a return that other investments cannot. Have a plan. The most important things they want to know are how much they can expect to get back, and how secure their money is in your hands. If you have a solid plan you will instill confidence in them and they will be more inclined to loan you their hard-earned dollars.

With the current state of the economy, it's obvious how important private lending is. There are no banks to deal with, and your credit is not at stake. If you have bad credit, it will be easier for you to get funding with a private lender. You'll get your loan fast without having to wait for the paperwork to come through and you won't have to jump through the hoops of getting qualified for a conventional loan. Real estate investment requires quick action, and private lending is the perfect way to facilitate that action.