When you find a good real estate deal, and want to do a fix and flip, you need financing. Purchasing the property can be tricky if you don’t qualify for conventional loans. Relying on traditional funding isn’t usually the best option. The best things to do is get financing from a private money lender. Private money loans have many advantages over bank loans. Here’s a few.
Traditional loans take weeks. When a good deal is on the table, you need financing fast. Private money lenders who specialize in residential lending can get you funding quickly. Most private money lenders understand the business of buying and flipping properties. They understand rehabbing them is a fast process, and then they are sold. Most private money lenders can get you money within days, or hours.
If you’ve turned to a bank for a loan – you know the ridiculous amount of paperwork. It’s tedious and boring. When you money for a great deal – time isn’t on your side. Private money lenders know this and streamline the process. They don’t waste your time with lots of paperwork. They give you your money quickly.
Banks are super cumbersome to work with. Their guidelines are very rigid, and essentially – not a one size fits all. When it comes to private money lenders, they are more flexible when it comes to loan terms and overall loan amount. They tailor the loan to your needs. Each fix and flip deal is different, and private money loans reflect this basic concept.
Traditional banks require a lot of documentation before issuing a loan. It takes time, and it’s a hassle. You need a lender who is concerned about the deal rather than every aspect of your financial life. Private money lenders focus on asset-based financing, and as a result, they focus on your collateral.
No Hidden Fees
When you borrow money from a bank and signs reams of paperwork, you don’t know what hidden fees you are signing for. In contrast, when you work with a private money lender, there aren’t hidden fees. All of the costs and repayment requirements are transparent and laid out.
Traditional banks are global enterprises, and as a result, they lend billions of dollars. They don’t care about you as a client. They take pride in making money, and are not going to work with you in case you need help. In contrast, private money lenders are usually local, and will work with you in case something happens unexpectedly on your project.