The world of real estate can be complicated. There is a significant amount of terms and concepts that you need to understand in order to be successful in the field. Real estate investors, borrowers, and entrepreneurs are some of the most basic terms you will need to know.
Fortunately, these are very self-explanatory and easy to understand. Here’s what each term means and the differences and similarities between them.
What is a borrower?
A borrower is generally someone who is looking to obtain financing for an investment property. Although potential borrowers are individuals, once their funding is approved, their funding is sent to their LLC or business that was set up for the purchase.
In hard money and private money lending, the funding provided is used to finance a real estate business. In the world of private credit when financing a real estate investment, there are borrowers and lenders.
Real estate investors are people who buy properties as investments to provide them with passive income. Real estate entrepreneurs are those who receive the majority, if not all, of their monthly income through real estate investing.
Once an investor or a real estate entrepreneur has sought financing for a real estate purchase, he becomes a borrower.
What are real estate investors and entrepreneurs?
Real estate investors and entrepreneurs are individuals who invest in real estate to generate income or benefit. There are many similarities between the two, but they are defined by a few key differences.
Real estate entrepreneurs were once investors, who shifted from investing only in a few properties to starting a business acquiring multiple properties as the primary source of income. Their business model as an entrepreneur is based on the act of investing full time in real estate.
In addition to having the technical ability to spot lucrative real estate opportunities, entrepreneurs have the critical ability to seize them at the right time. Eager to succeed just as much as the entrepreneur, investors tend to be less experienced, just starting out in the real estate business, or not spending as much time on their investment plans. As a result, they are more concerned with the small details and the day-to-day functioning of their business or portfolios.
At first, it makes sense for any real estate investor to care about the individual aspects of their property to make sure they stay afloat. However, as the investor grows, entrepreneurship and its principles become more and more plausible. Any investor can become an entrepreneur, but not all investors.
Real estate education
Knowing the real estate market is essential to becoming a successful entrepreneur or real estate investor. It’s obvious. With more knowledge or experience in the field, entrepreneurs are able to reduce risk, make better investments and build stronger relationships with lenders.
If you want to be a successful real estate investor or entrepreneur and think you have what it takes, at Stratton Equities we are well equipped and happy to help you grow. Every investor has started somewhere, and we have been privileged to be that somewhere for many newbie investors.
If you have a real estate investment opportunity in mind, contact Stratton Equities, the leading NON-QM hard money lender, to speak to one of our talented and experienced loan officers at 800-962-6613, Send us an email, Where request a loan prequalification today!