Private money lending or “private hard money loans” are an excellent investment choice for established and experienced real estate investors. The process offers a far better platform for the explanation of complicated deals to accredited investors.
There are thousands of accredited investors willing to invest in real-estate secured deals that ordinary banks will not or cannot back. Not having access to traditional bank funds is not an end for a complicated but other-wise sound deal. In other words, there is a significant amount of capital in active search of excellent, real estate secured deals.
Institutional or government requirements are often the reason that many traditional banks decline to fund an otherwise excellent real estate deal. Individual investors do not have to adhere to the same protocols and can make informed decisions based solely on the merits of the deal.
Interest rates are comparable to many traditional bank loans when all the fees and points are considered. In addition, terms are not set in stone and the details can be customized to meet the needs of either the borrower or the investor.
Accredited investors have usually been involved in their own business or in a firm at an executive level. As such, they understand the need for making decisions in a timely manner. Borrowers can trust that they will have a response in the shortest possible time without the need for the investor to confer with committees or oversight boards.
Borrowers know that they are obtaining funds from legal, reliable sources. Contracts are binding and the borrower can rely on the fact that the requirements of the deal will be honored. All traditional safeguards in a real estate deal are observed so that both the investor and the borrower can make informed decisions and act accordingly.
Ease of Use
There are highly reputable third party brokers who bring interested parties and private hard money loans together. These firms vet the deals, the investors and the borrowers. In addition, they can add value to your business part by providing access to a broad range of borrowers, brokers, realtors, and investors.