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4 Types of Investors Who Can Get an Advantage with Private Money Loans
aren't always the best option, but there are several scenarios where they actually give the borrower a clear advantage. Here are four situations where private funds eclipse traditional loans.
Before we look at how private money beats bank funds, let's define what private money is exactly. In short, issue short-term loans, typically for flipping properties, buying commercial real estate or getting quick cash. They are often just individuals who are looking for people to invest in, so they aren't subject to the same rules and regulations are the big banks. So who can benefit from this type of funding the most?
- Fix and flippers. Fix and flippers are people who are looking for a run-down or outdated property to buy, renovate and sell for a profit. Private money loans can be tailored specifically to their needs in terms of the length, rates and repayment plans. For instance, since a flip might take 5 months to complete, a flipper might take out a private loan for 8 months with no early repayment penalties. That way, when they sell the property, they pay off the loan, keep the profit and walk away.
- Long-term investors who don't qualify for a mortgage. These are investors who want to buy a property but don't fit into the bank's box, perhaps because of lack of income proof, a past foreclosure or a not-so-shiny credit score.
- Buy and hold investors. Buy and hold investors purchase a property to let it appreciate on the market for a while. Many like the easier qualifications of a private loan for the initial purchase. They then rent the property out to make money while they wait or refinance the property with a conventional loan.
- Any investor who needs funding fast. Since private money exists outside the traditional system, there's no complicated underwriting steps, third-party verifications and hoop-jumping like at the banks. In fact, investors can get approved in a day or so and have funds in a week, letting them move faster on a great deal.
Are There Any Cons to Private Money Lending?
offer convenience, flexibility and speed, but there is one area where they can't usually compete with bank loans — the rates. Interest rates are typically higher with these types of loans because of the risk. You'll also need to be able to put up an asset like a property (this can be the property you're purchasing) as collateral.
Private Money Loans in ArizonaIf you fall into one of the above categories, a might be the answer to your real estate prayers. All it takes is a phone call to Level 4 Funding to find out!
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
[email protected]
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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