Private Money Lending - What is the right time to consider?

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Private Money Lending - What is the right time
to consider? 2625 East 14 St. Suite 209
Brooklyn, NY, United States 11235 info_at_expresscap
italfinancing.com www.expresscapitalfinancing.com
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If youre in the real estate investment industry,
there will come a point where youll realize
that obtaining financing is one of the most
challenging and overwhelming aspects of the
entire process. Getting approved for funding
from traditional bank lenders is far from the
easiest thing to doespecially if youre on a
tight project deadline as is often the case for
fix and flip loans for properties in particular.
It becomes even harder to acquire capital when
you are a house flipper since the property you
want to purchase will typically need to be
revamped and banks are notorious for rejecting
applications for funds for old, worn-out houses.
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This is in large part why real estate investors
of all experience levels have been migrating
towards private money lending in recent years
due to the numerous advantages that this
financing route has over traditional lenders.
Still, it should be noted that private money
lending is not a one-size-fits-all affair. You
need to be proactive and do your homework to
learn the ins-and-outs of private money lenders,
what terms and conditions best fit your
particular real estate portfolio and the lenders
servicing your area.
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Private money is a finance package that is
sourced from an entity that is not a traditional
banking or financial organization. Private money
can be comprised of funds from your family, or,
alternatively, from individuals or entities that
you have no previous affiliations with. In the
latter scenario, in which the financing is being
sourced from private organizations, the capital
is termed hard money lenders and differs
slightly from private money lending.
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Private money lending is premised mainly on
establishing and maintaining relationships
compared to other financing methods. Thats not
to say that private lenders still dont require a
solid project proposal in order to agree to
extend you any amount of money upfront. When it
comes to private money, the interest rate ranges
between 8-12, which is considerably higher than
the rate typically associated with traditional
bank financing. This is attributable to the
inherently higher risk profile associated with
this financing option. But private lending offers
other advantages that make it an ideal choice
for many real estate investment projects. All
you need to contact professional private lenders
for real estate.
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If you are just starting out in the real estate
investment sector, you may experience some
initial confusion regarding what category of
financing you should utilize, whether it be a
conventional loan, private money, cash, or hard
money. The following is a brief overview of the
two main instances where you should consider
private money lending as a potential financing
option.
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One of the primary advantages of private money
lenders is that their approval timeline is
exponentially shorter compared to traditional
financing options. To illustrate, in order to
obtain approval for a conventional loan, you
will usually have to wait for up to 45 days, and
even then, there is no guaranty that you will be
approved at the end of this waiting period.
Banks and financial institutions impose strict
regulations when it comes to what projects and
individuals it can offer funding to. Houses that
are in relatively poor conditionsuch as those
typically targeted by real estate investors
looking to fix and flip usually dont have a
favorable financing approval rate from banks.
House flipping is inherently a very
time-sensitive affair, and you will need funding
as quickly as possible in order to get a
favorable return on investment.
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If you are entertaining the idea of buying and
holding a property, you will still require
efficient funding. A property that is priced to
sell will not linger on the market for long and a
house purchased at a reduced price point will
produce optimal cash flow down the road. Thats
where private money lending comes init can take
as little as three minutes to get pre-qualified
and then it typically only takes between ten and
fifteen days to get funding. That is the big
reason why private money is considered the best
option for many investors.
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Your Credit Score is Sub-Optimal

• It could be that you are in no particular rush to
  obtain funding. Still, the credit score is one
  of the most decisive factors banks take into
  account when considering a loan application.
• Alternatively, private money lending
  organizations prioritize the quality of the
  deals you propose as opposed to your credit score
  when deciding whether or not to approve your
  application. Put simply, if they believe that
  they can make a solid profit from the deal you
  have in mind, then they will offer you the cash
  you requested.All told, private money lending is
  a powerful tool for real estate investors to get
  streamlined financing with the least amount of
  red tape involved. It can make all the difference
  between sealing the deal and you walking away
  with empty hands.

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Thank You!!
2625 East 14 St. Suite 209 Brooklyn, NY, United
States 11235 info_at_expresscapitalfinancing.com
www.expresscapitalfinancing.com