private money lender

The nature of the fast-paced real estate industry creates a need for ever-present cash flow. Access to finance can help you cut into the sweet house flipping deal at discounted prices. However, bad credit ratings and bankruptcy filings can deter you from accessing loans from traditional lenders. And you are not alone. Currently, over 68 million Americans have a poor credit score. Luckily, a private money lender is a viable option that will offer quick cash with a lesser stringent approval process.

Your Credit Score Rating Doesn’t Matter, Property Value Does

Real estate investments are a tricky lot, especially without quick access to funds. Hard money lenders offer private loans that are easier to access than traditional bank financing. Banks are notorious for setting frustrating bureaucracies for loan advancement with strict background checks. Most private money lenders only focus on the property value of the house to be flipped-not your credit rating.

Besides, a private lender will process your loan quicker than traditional financing options. Usually, the waiting time is around two to five days, with some offering instant loan advances. Good luck finding a bank that will approve your loan within that period.

What Do You Look For In a Private Money Lender?

Your search for a hard money loan in California requires proper research. Here are six tips to guide you through the process:

  1. Go local: Though you may access any loan service in the nation, you should search for a private money lender located within your state. It gives you a chance to organize for a face to face meeting. Additionally, most loaners prefer to inspect the property first before approving the loan.
  2. Transparency: The hard money lenders you choose should be upfront about all their figures. They should disclose their fees, interest rates, and down payments clearly in the contract. You should be comfortable with the deal before signing the document.
  3. Competitive rates and points: Another significant factor in the flipping business is the interest rates for hard money lenders. Generally, the rate points are higher than those in traditional financing options. You should choose a lender that offers favorable rates that will help support your business growth.
  4. Specializes in the real estate industry: You should apply your loan to a private money lender with a firm foothold in asset-based lending. Focusing on real estate means they understand the local market better. They will also be more willing to work through the unique challenges you may have instead of only focusing on a purely financial perspective.
  5. Responsiveness: The dynamic market of the real estate industry demands a quick turnaround for your financing options. A fast loan approval works in your favor, as you can offer ready cash to the seller. Look for a lender that can respond quickly to your inquiries and with a faster loan approval process.
  6. Licensed dealer: It is vital to work with an approved lender within the state. In California, the California Bureau of Real Estate issues the licenses, along with a mortgage loan originator endorsement from NMLS.

In Conclusion

Private money lender offers quick access to cash for your house-flip deals. Finding the right creditor is essential in sustaining your business model. Are you looking for a private money lender in California? Reach out to ARC Private Lending to work out a loan option for your real estate deal.