What is Private Money in relation to real estate?

Question by Anton D: What is Private Money in relation to real estate?
I am looking for information about investing in real estate with private money. I have heard the term and have seen a definition of it that says it is money that is loaned by a private organization, and not a formal one like a bank. Still seems a bit vague to me. Any clarification would be appreciated.

Best answer:

Answer by rlanicek
Private money loans are just that–loans by an individual or institution, not a conventional mortgage company or bank. The most common one is a “hard money” loan. Easy to qualify for because credit and income are not important. Hard money lenders will normally lend up to 70% of the ARV (after repair value). The interest rates are very high–but most investors only use them for short term deals like flips.

Rick
www.fairwaymortgagelending.com

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