When you’re ready to grow your wealth and increase your financial freedom, real estate investing is a great place to start. However, it can be difficult for the average up-and-coming investor to access the kind of cash they need to secure a great investment property. For investors who don’t want the fuss of dealing with a huge bank, private lenders present a fantastic opportunity to access the funds you need without all the stress and frustration.
What Is Private Money Lending?
Essentially, private money lending is just an arrangement in which the borrower takes out a loan from a private, non-institutional entity rather than a large, corporate chain. Generally, these loans are secured with a note and deed of trust and are primarily used for allotting funds towards real estate investing.
Why Is Private Lending Beneficial to Real Estate Investors?
Private lending is designed to give the borrower options and keep you in control. Because you’re dealing with a smaller entity, you’re less likely to be taken advantage of or to fall prey to complex terms and spikes in interest rates. A few of the most common benefits of working with a private money lender include:
1. Private lending puts money in your account faster.
The beauty of working with non-institutional lenders is that you’re cutting out a lot of the middle men and a lot of the fuss. When you make an agreement with a private lender, you can often access your money very quickly—in some cases, you may even get immediate access to your funds. This is perfect for those moments when a to-die-for deal presents itself and you need to act fast.
2. Private lending provides direct access to liquid cash.
Nothing puts you in control of a real estate deal like cold, hard cash. With private lending, you can avoid bidding wars and higher prices by increasing your down payment or even paying for your properties in full. This keeps you from having to deal with the headache of a mortgage as you prepare your property for the market.
3. Your personal credit score is less likely to keep you out of the game.
In a perfect world, we’d all have glowing, perfect credit scores . . . But sometimes, life happens. If your credit report has a few dings in it, you might have a hard time securing funding through a banking institution. However, a private lender is far more likely to be willing to work with you rather than immediately writing you off based on a less-than-ideal credit score.
4. Operate within your network.
Private lenders exist everywhere. In fact, there’s a strong chance that you already have a relationship with a private lender! Working with private money lenders allows you to choose lenders who you know, like, and trust rather than putting you at the mercy of huge institutions.
Hard Money Lenders is an established private money lender based in Chantilly VA.
If you’re looking for funding opportunities and want to work with a small, non-institutional entity to secure your next investment property, get in touch with us HERE.