If you’re new to real estate investing, you probably already know that some deals are too good to pass up – but that banks take weeks or months to approve loans, and even then, they may not give you the most favorable terms to make the deal worthwhile.
Here’s what most new real estate investors learn pretty quickly: a hard money loan is nearly always the only type of financing a new investor can get without having much capital stashed away.
Private Financing for New Investors
Because banks take so long, and because they won’t typically lend you money based on the after-repair value of a house, it’s typically best to go through a private lender. It’s important that you know private lending is different from traditional bank lending, though – particularly on these points:
- Your credit score matters in hard money, but not as much as it will with a traditional loan.
- Even if banks have turned you down, private financing is usually still an option.
- Private financing depends on the assets you have to guarantee your repayment. Hard money is a form of asset-based lending.
- The process is typically quick and easy. A hard money lender can finance you quickly enough to let you jump on great deals – the process often takes a week to 10 days to complete, but it can be wrapped up sooner.
Is Private Financing Right for You?
Ask yourself:
- Will a bank or traditional lender approve me for this type of loan?
- How quickly can a bank approve my loan application?
- Would the bank or traditional lender give me enough money to cover my expenses when it comes to rehabbing the house?
For some people, private financing is the only option. If that might be the case in your situation, call us at 404-814-1644 or get in touch with us online. We’ll be happy to discuss your needs and find out whether private lending is the right solution for you.