Real estate investments are a challenging business because conventional funding is difficult to get. Since this option is not available for many people, they look for different financing options that are better than conventional funds.
Private money loans are one such option. There are multiple benefits of using this option.
Fast Approval Rate
Banks tend to make the loan process difficult and long. One of the biggest benefits of hard money lenders and private money loans is the quick approval times.
Valuable properties aren’t easy to find, and when one does find them, the goal is to move quickly to snatch the property up before someone else does. The approval can happen in a matter of a few days meaning investors can easily close on the property with cash in their hands. Putting in a cash offer will be another plus with the seller.
Credit Scores Don’t Matter
Unlike banks that make their decision based on the credit score, hard money and private lenders are not as critical. Credit scores aren’t as important as the property’s actual value to them.
Another property can be used as collateral to invest in as well. Even if the property needs repairs, they can be factored in the value once completed.
A Better Negotiation Position for Real Estate
Sellers will always go for buyers that can pay immediately. For investors, it’s just not about strategically investing in the property but also getting it at a fair price.
With private money loans, approved investors are under a better negotiation position. Buyers can close early and with fewer troubles, which is an attractive point to the sellers.
Good Substitute to Conventional Lending
Conventional lending can tap out quickly. For those who rely on real estate loans, conventional lending can eventually run out, and the bank will not finance them further.
Private money loans are a good substitute because it doesn’t hamper the investors’ ability to purchase more properties due to a lack of funds. Private money lenders typically don’t have such limits. Their focus is on the property investment and not the person investing in it.
Past Mistakes Have No Negative Impact
A major advantage for real estate investors when going with private financing is that their past mistakes don’t make a negative impression.
Past bankruptcies, foreclosures, mortgage loans, or any loan modification is none of their concern. With private money loans, buyers can continue to purchase properties.
Learn More About Real Estate Financing Options
Looking to finance a real estate property? Contact Insula Capital Group. They’re a private real estate investment company that offers people fix and flip and private loans. Their services include fix and flip hard money lenders, hard money construction loans, private financing, etc.
Reach out to them to learn more about real estate loan options.