You’re walking down the street when you see your favorite corner store. It was the best place to go as a kid. It had comics, candy, and colas. The three Cs any kid loves. But looking at it now, it has the three Cs no one likes: cracks, cockroaches, and code violations.
You know it’s better than this. It’s in a prime location that still gets tons of foot traffic. All it needs is some renovations, updating, and new management.
“If I had the cash I could redo this place right,” you think, “Heck, I even know someone who’d LOVE to rent it!” There’s just one problem: You don’t have the cash to buy or renovate. Enter private money loans.
In basic terms, a privet money loan means you’re borrowing money from a individuals or company that lend their own money instead of a bank. In the situation above, you’d use a private money loan to buy and renovate the corner store to rent it out.
You might opt for a private money loan for two reasons: You need money quick or don’t meet the qualifications for a conventional loan.
Private money loans are usually short-term, with terms lasting 1-2 years.
Private money lenders usually provide loans which are backed by real estate assets. The loan can then be used to buy multifamily buildings, condos, houses, business buildings. Your private money lender can range from a private lending company to a personal friend. When people do refer to private money lending, however, they’re usually talking about hard money lenders.
Pretty much anyone can use a private money loan. As we said above, they can be real estate investors who need quick cash, or who don’t qualify for conventional loans. Below, we’re going to run through several situations suitable for private money lenders.
You’ve found the perfect house. It has everything, pool, deck, and wrap around porch. You couldn’t be happier. And your kids can’t wait try out that pool in summer. It’s all a dream until seller wakes you up with:
“I need to close by next week or no deal. Sorry.” You could go to your bank, but their funding pace makes snails look fast. That’s when you turn to consider a private money loan. You could get the money you need without all the wait. Most private lenders will not lend on owner occupied houses, but it is possible to fine one.
Look, we have all been there. Sometimes your credit is not the best and that’s OK. Your passion for real estate investing does not have to wait! You can get the money you need to keep your bank account and credit in check.
Privet money loans are also perfect if you haven’t kept great financial records. It’s not for your lack of trying, you do. It’s just that sometimes, the only thing Microsoft Excels at is making you frustrated. So while you know your financials are fine, bankers might differ.
With a private money loan, you won’t have to worry about your records.
You might think that real estate is out of your reach because of your foreclosure. It weighs you down emotionally, filling your head with the false idea that you could never borrow again. Private lenders like Gauntlet Funding disagree. While a conventional bank might make things tough, private lenders don’t. They work with you to get you the cash you need, when you need it. We had many customers who were real estate investors and were hurt during the economic downturn of 2006 through 2009. Gauntlet Funding helped many of them build their wealth back to even higher levels then before!
Do you have your eye on the perfect house to flip? Maybe you drove by it one day and it just spoke to you. With a private money loan, you could buy a property, fix it up, and sell it at a profit later! We can even fund the repairs for you.
You’ve spotted the perfect investment property. It has everything you need, great location with easy parking. Plus, you know the seller! There’s no way you’d not get the property now! But when you’re about to put in your bid you hear the three worst words ever:
“Cash bids only.”
“I can’t do that,” you think, “Who has that kind of money!’ With a private money loan, you could! Private money lending allows you to get cash you need when you need it.
These investors use a hard money rehab loan to buy and then renovate a property before renting it out to long-term tenants. They can also be used to finance multifamily properties when there is a need for renovations, as conventional mortgages usually do not fund renovations.
If you are looking for a private money loan to finance your next real estate investment, look no farther than Gauntlet Funding. Gauntlet Funding offers the most competitive rates in the market for prime borrowers with no prepayments penalties. We are an organized and transparent system that will get you funded in little time after you have undergone the approval process! Contact Gauntlet Funding today at (631) 465-2161.
Private Money And When To Use It: A Guide| Gauntlet Funding-Melville, NY