private money lender

Private money lenders can be a breath of fresh air to real estate investors looking for convenient financing. In simple terms, a private money lender is any individual or entity (as opposed to a traditional bank or credit union) that provides loans for real estate purchases.

Whether you’re a short-term fix-and-flipper or a long-term real estate investor, getting financing from a private money lender comes with several benefits.

Fast Processing

When you’re planning to invest in real estate, it’s important to set things in motion as soon as you spot the right listing. The seller will want to see proof of funds, and they may even want a down payment to confirm your commitment.

This can be tricky if you’re dealing with a traditional lender that can take several weeks to process your applications. On the other hand, getting a loan from a private money lender only takes several days.

Reduced Paperwork

One of the reasons bank loans can take so long is that the bank often requires a lot of paperwork that needs to be assessed later on. Besides that, the underwriting process can also be lengthy. In contrast, private money loans are easy to apply for, and you won’t need to submit a significant amount of paperwork.

Flexible Qualification Requirements

According to the latest statistics, about a third of Americans have poor credit. You can then imagine how difficult it is to apply and get approved for a loan with bad credit. Fortunately, private money lenders don’t just look at your credit score when considering whether to approve the loan. They also consider your income and the size of your down payment, so they are a little bit less strict.

It’s Possible to Make Cash Offers

Cash is indeed king. Given that some lenders enable you to make a cash offer that covers up to 90% of the price, you’ll be in a better position to negotiate a favorable deal. It also means that making a down payment becomes more affordable.

Multiple Loans help to Scale Your Business

Getting multiple loans to fund real estate transactions can be difficult if you’re dealing with a bank. But some private money lenders are willing to work with you on several deals at the same time if you want to purchase more than one property.

It’s safe to say that private money lenders provide an essential service that has helped many investors get ahead. Overall, the top benefits of dealing with a private money lender include easy, convenient, and fast access to loans or cash offers.