Private Money Loans for Real Estate Investors
Why Private Money Loans are Great for Real Estate Investors
One of the best ways of earning a great income is investing in real estate and flipping properties. One of the biggest decisions you will have to make when looking to purchase an investment property is how you are planning on financing the investment.
Luckily, there are a lot of options to choose from for financing your investment property. Most people choose to go with a traditional bank but there are some advantages to getting a loan through a private money lender that should not go overlooked.
Underwriting and Qualifications
Most of the time, the underwriting process is a lot easier and less time consuming with private money lenders. Their qualifications and criteria are also not as strict as traditional banks. Getting a loan through a traditional bank can be stressful. It will take a lot more time and you will need to provide the lender with a lot of paperwork like bank statements, income verification statements, and more.
Then, the bank will analyze your paperwork and decide if they should approve you through their underwriting process. During this time, it can be very stressful and time consuming. Then, all of this time might be wasted just for you to get denied because you don’t meet all of their parameters.
Private money lenders will require some documents (not nearly as much) but they will focus more on your business plan rather than your financial position. They do not uphold the same strict approval standards like traditional banks do. Private money lenders will be more likely to approve the loan that you need.
One of the biggest advantages to getting the financing you need through a private money lender is that you will get the loan you need much quicker. Most of the time it will take at least 60 days to go from the initial application to the loan funding process at a traditional bank. Private money lenders are much quicker at giving you the loan you need.
It will usually take a private money lender just a few days to review the loan proposal and lend you the capital you need to finance the investment property. Working with a private money lender could potentially provide you with a much better qualifying bid when trying to buy an investment property.
Most people who are looking to purchase a property as an investment and then renovate and flip it will usually be hit with higher costs than they had expected. There are almost always unexpected costs to renovating and flipping a home. Traditional banks are hard to work with so if you need more financing to take care of these extra costs you might be stuck. This could possibly prolong or cancel your renovation.
Private money lenders tend to be a lot more knowledgeable on real estate investments and can understand that costs usually exceed the original budget. Private money lenders are more likely to work with you to find a solution and get you the capital you need to finish the renovation.
Private money lenders tend to be much more experienced with house flipping projects over traditional banks. They will be able to give you valuable insights about your business plan and help you better strategize everything. They might be able to give you tips and advice that will earn you a greater return on your investment or help unveil potential project risks that you had no idea of.
Contact our Commercial Real Estate Financing Experts
If you are looking to invest in real estate and are wanting to flip a home you should call Titan Funding Solutions today. We have some of the most affordable and flexible lending programs around.