When you find a good real estate deal for a fix and flip, then you need financing to purchase the property. Relying on traditional funding, primarily from a bank, is usually not the best option. A better route is to obtain financing from a private money lender. Private money loans have a lot of advantages over bank loans. Here are a few of them.
A traditional bank loan can take weeks to process. When a good deal pops up, you need funding fast. Private money lenders who specialize in residential lending know this and can get you your money quickly. They understand the business of buying properties, rehabbing them fast and then selling them. Most private money lenders can get you the money you need in a matter of days or hours.
Fewer Pieces of Paper to Sign
If you have ever applied for any kind of bank loan, then you know the mounds of paperwork that you have to read and sign. It is tedious, boring and time-consuming. Signing dozens of documents just slows everything down. When you need money for a great deal, time is of the essence. Private money lenders know this and streamline the process. There are fewer pieces of paper to sign, getting you your money that much more quickly and with much less hassle.
Flexible Loan Terms
Banks are cumbersome institutions. Their lending guidelines are rigid and essentially “one size fits all.” Not so with a private money lender. These lenders are much more flexible than a traditional bank when it comes to loan terms and are able to tailor loans to specific needs. Each fix and flip property is different, and private money loans reflect this.
Less Documentation Required
Traditional banks require pages of documentation before issuing a loan. Not only does this take time, it is a hassle and invasive. If you have a great deal waiting and just need fast financing to turn a profit, then you need a lender who does not need to know every aspect of your financial life. Private money lenders offer asset-based financing on qualified collateral, and a good private money lender will develop a long-term relationship with a client.
No Hidden Fees
When you borrow money from a bank and sign reams of paperwork, you have no idea what fees are hidden in all those pages. You are usually in an office with bank officials who slide documents over to you and superficially explain what each one means. Once you put your signature to each one, then you have committed to paying whatever fees the bank has added. With a reputable private money lender, there are no hidden fees. All costs and repayment requirements are laid out in plain view.
Once upon a time, banks were local institutions. They lent money for local community projects and knew who their customers were. These days, traditional banks are global enterprises with billions of dollars in assets, thousands of employees and hundreds of offices. Most customers are nothing more than a number with a dollar sign attached. This is not the case with private money lenders. Many like to deal with local projects. They want to know to whom they are lending money and take pride in seeing the success that their customers achieve from using their financing.
If you are a real estate investor in need of fast, hassle-free funding, then contact us. We understand the fix and flip business and streamline the funding process. Many of our clients are repeat customers. We are here to get you the money that you need to make your next real estate deal a reality.
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