Thanks to private money, obtaining financing to buy investment properties is fast and easy. You don’t have to endure the tedious process of applying for bank loans or wait endlessly for financial assistance that wouldn’t come. Because of this type of non-traditional financing, you can quickly start a real estate investing project as soon as possible.
As the name implies, private money is a type of financing being offered by private individuals or organizations. It is less restrictive and it involves less red tape compared to traditional loans offered by banks, mortgage companies, credit unions, and other traditional lending institutions.
According to the many seasoned real estate investors, it would be wise to seek the assistance of private money lenders if you are having trouble securing funds for your investment properties. It is because compared to their institutionalized counterparts, private lenders are more amiable and easier to deal with. They won’t make you wait for months or years only to reject your loan application. And most of all, private money can give you perks that you won’t get from traditional loans.
First, you can borrow funds from private lenders even if you have a bad credit rating. Now try doing that with an institutionalized lender. You’re definitely going to have a hard time convincing him or her to grant your loan application.
The reason why private money lenders are not interested with a borrower’s creditworthiness is because private money is asset-based. It means that a private lender looks into the after repair value of the property, for which the loan is being made, when assessing a loan application. Thus, if the property can fetch a good price after it has been repaired, then a private lender will provide you with the funds you need regardless of your credit score.
Another advantage of using private money for your investment properties is that it offers you more flexibility and more control. You can negotiate the terms of your loan. You can also ask a private money lender to create terms that suit your financial capabilities.
And most of all, you can protect your credit rating by using this type of creative financing. Because private lenders are private entities, all transactions made with these individuals won’t be reported to the credit bureau. Thus, using private money loans won’t reflect on your debt-to-income ratio.
So if you want to avoid all the hassle that comes with borrowing money from banks and traditional lenders, then you should heed the experts’ advice and use private money to buy investment properties instead. To learn more about private money lending, log on to www.Rehab-Real-Estate.com.
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Source by Daniel Mc Grey