Why You Should Use Private Money to Buy Real Estate
Category : Hard Money Loans , Real Estate Loans
Investing in real estate is a great way to earn money nowadays. Unlike dabbling at the stock market, it offers you a continuous source of income as prices of real estate are generally stable compared to stock prices. However, one of the main problems of most real estate investors is where to find money to buy investment properties. Fortunately, there are alternative sources of funds and one of them is lenders of private money.
Basically, private money is funds being provided by private individuals or organizations. This particular type of financing is relatively easier to obtain compared to traditional bank loans and mortgages. It is because private lenders often agree to provide loans without heavy paperwork and strict regulations.
One of the biggest reasons why many real estate investors ask private money lenders for help is to protect their credit rating. When you borrow funds from these financiers, it won’t reflect on your credit history because the transaction between the two of you won’ get reported to the credit bureau unless you tell the office yourself.
Another advantage of obtaining private money to buy investment properties is that private lenders are not interested with the borrower’s credit score. Unlike traditional lenders such as banks and credit unions, these private financiers will still allow you to use their money regardless if you have a bad credit history. As long as you can prove to them that the deal is worth their time and money, they will give you the funds you need.
When it comes to private lenders, there are no long lines or long waiting period. Because you only need the approval of one person, you don’t have to deal with a processing team or panel that will reject your loan application after waiting for months. In addition, you don’t have to procure tons of documents and other whatnots that could take you a lot of time.
There are a number of ways to find private money lenders. One of the most effective methods is to ask around. You can ask your friends or family to lend you some funds. Your next-door neighbor can also be a private lender.