If you’ve been watching the news lately you might have heard some of the breaking headlines about our current real estate and finance markets. Actually, it’s kind of hard to miss. I know, because I don’t usually watch the news and I am having a hard time avoiding all the gloom and doom. So, what does it mean to us as real estate investors now that money is tightening up for both our buyers and us as investors to buy houses?

Well, it opens up an amazing opportunity for those that are willing to roll up their sleeves and get to work raising private money.

Private money, unlike institutional money, is money lent by individuals that are looking to get a better and/or more stable return on their money instead of depositing it with a bank or investing it in the stock market. Usually a bank will accept deposits at a low interest rate and then turn around and lend that money out at a higher rate of return and make their profit from the difference. With private money, the private lender bypasses the bank as a middle man and becomes the direct lender.

With the stock market tanking and investors looking for a secure place to park their money where they’re not likely to lose half its value in a year, well collateralized loans against real estate have become even more attractive. For investors who buy at nice discounts and generate profits from buying and reselling or buying and holding, these private loans present a great opportunity. They facilitate investing in this buyer’s market that has forced many other investors to the sidelines because they are unwilling to do the work required to raise private money.

So, in the future, I predict that the investors who become experts at raising private money will see huge rewards and will help their private lenders too in this shaky economic time.

James Orr is a professional real estate investor, marketing expert and founder of the Learn To Be Rich™ on-line investment game.

To find out how James raises private money for his own business, please see James’ Private Money Program on the Real Estate Investor Cookbook.

He also works with a network of real estate agents, brokers and real estate investors across the United States through the AnalyzedDeals.com website.