When Is a Private Money Loan the Right Option?

You can use private money loans for short- or long-term real estate investment opportunities. Short-term loans are typically for all-cash buyers who intend to flip or renovate the property. Long-term loans are generally for investors who intend to rehab a property before refinancing.

However, traditional institutions don’t offer these loans, and conventional mortgage options may be difficult for investors with undesirable credit. Due to the fast-paced nature of the real estate market, you may wonder, “when is a private money loan the right option?” Keep reading to discover three scenarios when a private money loan may be your saving grace.

If You’re Low on Time

You should know that the real estate market is fast paced, and if you don’t have the money then and there, you could miss out on a lucrative opportunity. While traditional money lenders are an option, they typically have a longer approval process with an extended list of requirements.

Private money loan servicing is quicker and deposits the money into your account within a week or less. If you build a strong relationship with your lender, you can get your cash even faster and possibly have more financial opportunities.

If You Have a Business Plan

There can be a risk when investing in commercial or residential real estate. Traditional lending institutions will ask for a detailed and lengthy business plan. Sometimes, they’ll pass and decline your request. Although you’ll need a business plan for private lenders, the process will be straightforward. You may need an exit strategy to show the lender they won’t lose their money, but it will be less intimidating.

If You Need a Fresh Start

If you have a bad FICO score or poor credit history, that could be the number one reason why traditional institutions turn you away. A private money loan is the best option if you’re struggling with a low credit score. Most private lenders are more lenient because there’s less focus on your credit score and more on your property history and value.

A private money loan is a great way to finance your real estate investment dreams. Take advantage of faster approvals, a more straightforward process, and a secured portfolio by working with Val-Chris Investments. Discover our lending options by contacting us today.

Leave a Comment