Real Estate: Why Use Private Money Lenders?
There are many resources from which you could ask for money or funding. The most commonly used resource is the bank. Others use hard money lenders, while some prefer to do creative financing or prefer their line of credit.
But there is one resource that can prove to be more advantageous and more beneficial to you. In fact, it can be considered to be the best, the simplest, the cheapest, and the safest way to get funding!
Private lending is a growing trend in the financial realm that is slowly being embraced by many. It’s a very simple process and you won’t have to go through all the hassles and headaches that a bank or a hard money lender does.
Why is private lending better?
First off, you have to recognize the disadvantages of using the bank or hard money lenders as your funding resources. With banks, for example, you most probably will lose the best deals that you want. There are also all those down payments, points, loan fees, and all the paperwork. It takes up a lot of time; it could take months for the bank to make a decision about your deal and by then you might have already lost the opportunity to acquire a property!
There is also no definite relationship with you and the bank. The bank would see you as just one of the many thousands of people wanting to get a loan from them, and with this perception could just flatly refuse to help you. Banks also makes some changes in their rules regarding loans.
You also have to meet important requirements for the bank to consider lending you some money. If you have a poor credit, it’s a “no.” If you have too many properties and too many deals, it’s another “no.” If your income doesn’t suit the bank, then it’s a “no.” If you leave or quit your job, you’ll get another “no.”
While banks are very strict and very time-consuming, hard money lenders will squeeze you dry and empty your pockets. In doing deals with them, you have to give a down payment of 15% and you have to pay the money back in twelve months. You’re also going to be covering the expenses for renovations and repairs. By the end of the deal, at closure, you’ll end up with less money while the hard money lenders have more.
With private money lending, you’ll be able to set up and close your real estate deal at a simpler and faster pace. No hassles, no forms, no sweat! With private lending, you are in control of your finances, have no monthly payments, and you have the ability to generate massive funding. What’s also great is that it fits every type of deal there is in real estate!
It’s quite simple and easy. It doesn’t require a lot of work and you just need to make a phone call once you’ve gathered private lenders that can help with your funding. There are no more fees and no more loads of paperwork. All you really need to do is gather up private lenders to a luncheon meeting or dinner appointment (whichever would suit you), explain to them your program, answer their questions, and make a professional relationship with them. Once everything is established, an army of private lenders and funding will be an easy reach for you.
The most important reason why it’s better to use private lending in your real estate deals is that you are in total control of the money. Working with banks and hard money lenders won’t give you that satisfaction because they have too many rules and requirements. With banks and hard money lenders, it’ll be like you’re begging for money. With private lending, and with the relationship and trust that you’ve established with the lenders, it’ll be just like taking out some of your savings since you know that they’ll just be there to help with the funding if you just call them.
Ultimately, it all boils down to being in control of the money and the situation. With private lending, you are.
