There are literally billions of dollars available for conventional real estate deals that involve the tried and true method of selling a single-family home from one homeowner to the next. Finding investment capital for deals that vary from this formula can be somewhat more challenging.
While large real estate firms and well-heeled investors can often fund a real estate deal themselves and get a loan on the property afterwards to recoup their investment, smaller investors must look to private money to help consummate their deals.
Finding Private Money Deals
It is possible to find, investigate and evaluate your own private money deals but the process can be fraught with pitfalls and inconveniences for the average investor. Instead, consider the advantages of using a private money lending company. Both investors and borrowers can benefit from the options brought to the table. Here are just a few examples:
The Benefits of Private Money Deals
Safety – Private money companies go to great lengths to bring qualified investors, proven borrowers and scrutinized deals together in one place. This makes the process of finding the right deal far easier for both the borrower and the lender.
Security – All the appropriate legal processes are observed including inspections, appraisals, title searches and escrows. In addition, the deals utilize the same types of documentation as any other traditional loan. In every instance, both the borrower and the lender are fully protected. In addition, the lender has his loan secured by a real asset at a substantial discount to the face amount.
Yield – Private money deals typically provide above average interest rates for the investor in return for flexibility, responsiveness and adaptability by the lender.
Convenience – The real beauty of deals brokered by private money companies is that they are transparent, readily understandable and convenient to close. In fact, private money lenders have the experience, expertise and resources to help at all stages of the process if there is a problem.
The Essence of Private Money Deals
Whenever contemplating a real estate deal, you should never lose sight of the fact that the money being invested is yours and that, ultimately, you will have to live with the terms of your agreement. Still, having a consolidated place where private money, borrowers and investors congregate cannot help but add stability, security and safety to a deal. It is certainly worth considering them before striking out on your own.