The goals of private money lenders are perfectly matched up with yours as an investor.
Here are six reasons to use private money lenders for your investment properties:
- Private lenders for real estate are offering competitive interest rates
Since a loan on an investment property is secured by a recorded Deed of Trust, private lenders can offer interest rates that are competitive with the open market. Additionally, since private lenders for real estate are looking for investment properties, they are more likely to offer these rates on properties without a current cash flow than traditional banks, which are still restricting lending.
- Private loans are faster and more flexible than other loans options
Since private lenders use the same investing principles as you do, they can make a quick decision, allowing you to avoid the long process of traditional bank underwriting.
- Private lenders’ debt service coverage ratio is less strict
Since private lenders do not have the same underwriting process as traditional loan servicing arrangements, they have more flexibility to look at other factors influencing loan repayment.
- Offer shorter terms
Shorter terms allow you to secure the property, avoid prepayment penalties, and look to traditional financing once the property is stabilized if necessary.
- Real estate give you better access to loans
While keeping traditional loan benefits. With private loans, you still have the same protections as with traditional bank loans, but are able to take advantage of a hard money loan process that moves more quickly and is inherently more flexible than conventional permanent financing.
- It is less frequent for private loans to be packaged and resold
For real estate look specifically at you and your property to make an investment decision, and once they have found a good risk they are unlikely to sell their investment. This allows you a measure of confidence that you will still be doing business with the same partners for the life of a loan.