Benefits of Using Private Lenders

Benefits of Using Private Lenders

Private lenders and hard money lenders are very similar but have a key difference.  Private lenders differ from hard money lenders based on where their money comes from when they lend it to you.  Private lenders’ money will come from investments outside of real estate, whereas a hard money lenders’ money is part of a business built around real estate and real estate investing. 

Private lenders can often be new to real estate investing, which may make them a bit naïve.  However, that doesn’t mean you should avoid them.  Rather, be patient and willing to work with them, as their money might just be one of the greatest ways to obtain funding for your real estate transactions.

Here are a few reasons to use private lenders’ money for your real estate transactions:

  1. Private money is quickly accessible.  Because private money comes from investments such as CD’s, stocks, mutual funds and other similar investments, the money can be quickly converted to cash.  This accessibility can allow you great strength and speed when purchasing real estate.
  2. Private money is cash.  Cash gives us strength when making offers on real estate.  Buyers without cash have a hard time competing against those that can offer cash.
  3. Private financing is easy to obtain.  Private lenders often look at the quality of a real estate investment over you, the borrower.  If paperwork, credit checks, and income reviews are not part of what you want in your real estate investment career, private lenders will often over look all of this when the investment is good enough.

Purchasing real estate can be very rewarding and getting financing through private lenders can make the process easy, quick and additionally rewarding.