Private Money Lenders: The Upside

Private Money Lenders: The Upside

Real estate investing is one of the most lucrative businesses in the industry. And if you are a real estate investor, there will be a chance that you will need to borrow money; specifically, on . There are numerous advantages when borrowing from private money lenders. These lenders of private money can also be termed interchangeably with hard money lenders. The difference is that private money lenders do not openly advertise their services.

If you are still quite skeptical to the idea of approaching a private money lender, don’t be. There are numerous advantages when borrowing from a private lender rather than borrowing from conventional ones. As this article progresses, you will the different upsides of borrowing from private money lenders.

Compared to hard money lenders, lenders of private money are not legally registered to any establishment. And as mentioned above, these individuals do not openly offer their services. The first advantage of lenders of is that they process transactions fast. The fastest possible time to lend you money is in a span of 24 hours. Also, unlike traditional lenders, they do not dwell on your entire financial history. Banks almost always take forever when evaluating a borrower’s credit history for up until two months.

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Another good thing about private money lenders is that they could lend you twice the amount than what banks can offer. Traditional lending establishments can only lend you a fixed amount, depending on your current monthly salary. If you have an unimpressive credit score, chances are, your loan application may not be approved. Or if it is approved, the loan amount will most likely be insufficient in your business.

However, there are minimal downsides when it comes to private money. Usually, they have very high interest rates. Also, the payment period are shorter compared to banks. Conventional lenders have payment terms for up to twenty years. Private money lenders, on the other hand, depend on the lender himself. You need work out payment dates with them.

As a responsible real estate investor, you need to promptly make the payment to any lender. Paying back the money on time will not only earn you a good reputation, but also keep strong alliances with these lenders. A thriving entrepreneur has a good and efficient team by his side can help maintain the  success he/she has today.

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