A Private money loan is one of the fastest routes to finance your next real estate investment. Generally, there are three sources of private money:
The first two sources depends on your circle of contacts. In this article, we’ll guide you on how to get a private money loan from the third source: hard money lenders.
The loan application process has two parts:
Most reputed and experienced hard money lenders provide pre-qualification of loan that can be done online. This process allows real estate investors to get approved to borrow funds. Also, it includes all the costs, processing fees, and the terms involved.
Once the borrower qualifies, the hard money lender will issue a pre-approval letter to the borrower. This letter is often presented to the seller of the real estate property at the time of buying.
The pre-approval letter is indicative of the buyer’s ability to buy the property. Attaching the letter with your purchase bid makes it stronger offer. It also proves your ability to afford to make the said investment.
The specific requirements for acquiring a pre-qualification vary from lender to lender. You can find this information on the hard money lender’s website. The most common requirements are:
Once pre-approved, you can find a range of borrowing loan options.
Remember the last time someone lent you a hand?
Hard money lenders collect any extra information required to make the final decision. They use this information to check the experience and the background of the borrower.
The most requested information is:
This part involves a rigorous evaluation of the risk involved in financing the project. Lenders assess the location of the property and its present condition. They also look for the potential value of the property post repairs and renovation. Moreover, the market sentiments and the borrower’s past experience is also evaluated.
Based on this information, the private money lenders complete the borrowing terms viz. interest rate, the term of borrowing, and any costs or fees involved. Once approval is granted, the funding is released to the borrower in installments.
Private money loans are usually short-term in nature with a duration of 1 to 3 years. This makes them ideal for:
It’s easy to get a loan unless you need it
Whether you are an investor looking to fix and flip properties or want to invest, a private money loan is the right financing solution you need.
At Gauntlet Funding, pre-qualification takes approximately 3-5 minutes and funding takes 7-10 days. We do not need a ton of qualifications to make you eligible for a loan. This elevates the risk involved in lending money. Thus, we usually charge between 8 and 12 percent interest rates on loans.
Call Gauntlet Funding today at (631) 465-2161 to speak with our experts. Discover the best financing options for your real estate investments.
How to Get a Private Money Loan | Gauntlet Funding – Melville, NY