Novice real estate investors may be a stranger to industry terminology, but seasoned investors are relatively familiar with the term of a private money loan. In fact, many investors tap into the versatile resource for their own financial endeavors. Private money loans are ideal real estate loans for properties and investors that don’t fit the traditional mold.
Private lenders establish their own standards for borrowers, which can help them develop a suitable investment approach. This process is a wise investment strategy for the most unique of situations. Let’s examine closer the top reasons to use private money loans for real estate investing today.
Simplicity: Fewer Restrictions and Fewer Verifications
Private money loans offer an array of positive features, including their mere simplicity. Acquiring traditional loans or conventional financing services tends to be far more complex, which means a slower process due to documentation. Conventional lenders rely heavily on financial history and credit checks.
In contrast, private lenders who set their own guidelines for loans generally require less upfront paperwork and less strict measures. Private lenders may verify the collateral or income of a borrower but tend to offer loans based exclusively on the property. The speed and ease of this process are ideal for those who are short on time.
Bridge the Gap: Shorter Term Options
Banks are ideal financing options for straightforward properties but are not one-size-fits-all. One of the reasons to use private money loans for real estate investing is their advantage over banks. Private loans are ideal for financing challenging properties. Since private lenders offer shorter terms, they allow you to secure a property without costly pre-payment penalties.
Using private lending allows breathing room for an investor to stabilize a property and forge on to search for more long-term or traditional financing if need be. This bridging of the gap is a solution for difficult scenarios, which helps property investors achieve their financial goals.
Flexibility: Creative Loan Options
The structures and terms of private money loans are highly flexible due to lenders basing loans on the value of the collateral. Private money lenders understand the particularly unique needs of real estate investors that conventional lenders shy away from. Instead of waiting weeks or months waiting on a decision from the bank, fast approval, funding, and turnaround are available to you.
If you’re searching for a private loan for an investment property, turn to Val-Chris Investments. With over 40 years of experience, we find creative solutions for private money borrowers without strict requirements or a long-winded turnaround time. You can secure an investment property loan at a competitive rate. Start an application today to ensure if our unique loan options are right for your investment needs.