All Forum Posts by: Stacy Patel

The main differences between private money lending and traditional bank loans are in how quickly you can get approved and how the application process works. As a private money lender, I can tell you that private lenders usually approve loans faster and with less paperwork, focusing more on the property and borrower’s ability to repay. Traditional banks, on the other hand, take longer and require more detailed financial information and credit checks. If you need quick and flexible financing, private lending might be the way to go, while traditional banks are better for more structured loans.

Hi Haley! Starting in private lending is a great move, and consulting a lawyer is indeed a crucial first step to ensure you have the right documents and legal protection. For lawyers in the Tampa Bay area, seek out those specializing in real estate or private lending. Additionally, network with other private lenders to gain insights and advice, define clear criteria for the types of projects and borrowers you want to work with, and understand the risks involved to manage them effectively. If you need specific recommendations or more guidance, feel free to reach out. Best of luck with your new venture!

Hi Jorge, welcome back to lending! You’re right that first lien positions are generally safer and preferred, especially as you’re getting back into things. Being in a second lien position does involve more risk, as you’re second in line for repayment if things go wrong. It’s often safer to stick with first lien positions initially to minimize risk. However, if you do consider a second lien, make sure to assess the property’s equity, the borrower’s creditworthiness, and the potential return to ensure it justifies the risk. If you have any more questions or need advice, feel free to reach out!

You’re right that working with a lawyer is an essential first step to ensure you have the right documentation and protection in place. 

Connect with other private lenders or join lending groups and forums to learn from their experiences. Networking can provide valuable insights and help you stay updated on industry best practices.

While it’s true that getting a second conventional loan immediately can be challenging, especially if you’re looking to maintain optimal financing terms, it’s not impossible. Lenders might have different policies on how soon you can obtain a second loan, and it may depend on factors such as debt-to-income ratio, existing debt, and property cash flow.

Hi James,

Great question! Gap loans can be a bit harder to find these days, but there are still some hard money lenders who offer them.

Connect with other investors or join real estate investment forums. Experienced investors often have recommendations for lenders who still provide gap loans.

Hi Layton,

Welcome to the real estate world!  

Start by reaching out to local hard money lenders in your area. They often have more flexible terms and can work with ARV instead of LTV. Local real estate investment groups or meetups can be a good resource for recommendations.

If you need specific lender referrals or have any other questions, feel free to PM me. Best of luck with your investments!

Maintaining open and proactive communication is key to a successful lending relationship. Thanks for highlighting this important lesson!

Finding a lender who offers less than 20% down for commercial properties, especially in areas like Gulf Shores, Alabama, can be challenging.
Seller Financing: This can be a viable option if the seller is open to it. Seller financing allows you to negotiate terms directly with the seller, which might include a lower down payment.

Hi Hugh,

Great post! Hard money financing can be a powerful tool, and your lessons are spot-on.