Private Money lending – especially sought after for fix-and-flip – is a near surefire way for investors to develop a successful real estate journey in a way that doesn’t feel overwhelming, insurmountable, or suffocating.
Private money lending – especially sought after for fix-and-flip – is a near surefire way for investors to develop a successful real estate journey in a way that doesn’t feel overwhelming, insurmountable, or suffocating. What makes private money lenders different?
They’re not banks. A win in and of itself, right?
In the past, real estate financing typically came from banks, government agencies, or insurance companies, however their list of strict requirements and long timelines haven’t been conducive to the average investor hoping to build their portfolio and turn a profit. Private money lending has become a critical component to the real estate industry and the success of many investors.
At the end of the day, private money lending allows you to secure a loan with real estate that is worth much more than the loan. If you’re exploring your lending options and are still unsure of where to begin, then consider why private money lending might be the best option for your investment business to grow.
The process is faster
While traditional bank loans can take months to review, finalize, and approve an application (who has that time in real estate investment?), private money lenders can get a loan processed as quickly as within a few days to a couple weeks. Considering most profitable deals in real estate don’t wait around, this ensures that your business isn’t put on hold due to endless red tape.
Moreover, private lenders can finance several deals at once without adhering to strict loan quantity parameters that banks usually have in place. For you, this could mean a more scalable business.
Private lenders are more flexible
Private lenders can finance up to 100% of a property’s purchase price and rehab. It is not uncommon for them to loan money based on the purchase price and repair costs. More importantly, for fix-and-flip projects, private money lenders offer shorter term loans since the property is meant to be placed back on the market within a year. As a first-time investor, a degree of flexibility and trust is critical.
You’ll likely find them in a private money lender.
Tailor made for your short-term properties
Banks are great options for residential home purchases or investors with excellent credit scores, but if you’re looking to work strictly with fix-and-flip opportunities, then private lending is the way to go. For either long-term rentals or fix-and-flip investors, private money lending is a great cost-effective way to scale up a profitable business.
Cut through the red tape
Tight restrictions on property loans? Stringent credit and financial background checks? Endless paperwork and a long waiting period?
You won’t find those with private money lenders, and what’s better, there is no one-size-fits-all approach to the approval process. Lenders typically evaluate each deal individually to provide a more customized offer that suits both your current circumstances and your future goals. The biggest distinction here is that you’re working with an individual who views you as an individual – not a large corporation with strict universal policies.
Private money lending is an excellent way to get your footing in real estate investment, develop a strong portfolio, and make a profit. If you’re ready to discuss your next investment. Contact Money Source of America Today