Beginner's Guide to Private Money Loans

Beginner’s Guide to Private Money Loans

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Private Money Lenders in New York are non-institutional lenders that issue short-term loans for purchasing and often, renovating their New York investment property.

Commonly known as “hard money lenders,” private money lenders offer private money loans to short-term fix-and-flippers as well as long-term investors looking for a rehab project or quick funding.

Are you looking for a private money lender to finance your next real estate investment? Gauntlet Funding offers competitive rates, at a fast turn around time!

How Does Private Money Lending Work?

Private money lenders usually offer loans that are secured by a real estate asset. These loans are used to purchase a house, condo or multifamily building.

Normally, when someone thinks about private money lenders in New York, they’re most typically referring to a hard money lender. This is because hard money lenders issue short-term real estate loans used to buy and flip an investment property.

Hard money loans are good for both short-term fix-and-flip investors as well as a way for long-term buy-and-hold investors to acquire distress assets quickly and stabilize them.

There are normally three types of private lenders. Each is based on the relationship between the borrower and the lender.

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”

– Franklin D. Roosevelt

The Three Types of Private Money Lenders


Family & friends


Colleagues, professional & personal acquaintances

Third Party

Accredited investors & hard money lenders

The Best Private Lenders

Hard money lenders are often called “third-party” private lenders, which is the furthest away from a borrower in terms of relationship. However, hard money lenders are considered the best private lenders because they’re the most reliable and have standardized interest rates, costs, fees, and loan terms.

Private money lenders are primarily right for short-term fix and flippers who want to compete with the short timeline of an all-cash buyer. However, private loan lenders are also right for long-term investors who want to rehab a rental property before refinancing into a permanent mortgage or seasoning a property before refinancing.

Private money lenders are generally best for the following types of people:Are Private money lenders right for me?

  • Fix and flip
  • Long-term and short-term investors who need financing quickly.
  • Long-term investors who need to season the property, or who aren’t currently eligible to qualify for a conventional mortgage but plan on refinancing once they meet qualifications.
  • Buy-and-hold investors looking to purchase and renovate a property before refinancing with a conventional mortgage or a non bank longer term rental product.
  • Private lenders often issue loans to short-term investors looking to make money flipping houses. Private lenders also issue both rehab loans as well as traditional hard money loans to buy-and-hold investors looking to purchase and/or renovate a rental property.
  • The best use for a private loan is for a fix and flip project. Fix-and-flip often seek short-term financing options that allow them to purchase, renovate, and sell a property within a short period of time. However, long-term real estate investors who invest in rental properties can also benefit from private money loans.

What is a private money lender?

private money lender, also known as a private lender or hard money lender, is an individual or a non-institutional entity that provides loans to borrowers, typically for real estate or business purposes. These loans are considered private because they are not issued by traditional financial institutions like banks or credit unions. Private money lenders can include individuals, investment groups, or private companies.

Private Money Loans Fund A Wide Variety of Properties

Hard money loans are often the best financing options for these types of properties:

  • 1. Apartments and condos
  • 2. Commercial real estate
  • 3. Single-family homes
  • 4. Multi-unit properties
  • 1. REO properties
  • 2. Short-sale
  • 3. Foreclosure
  • 4. Estate Purchases
  • 5. Tax Lien Foreclosure
  • 6. Auction Properties
  • 7. Pre Forclosure
  • 8. Handy Man Specials

Often this is because these properties move quickly and investors often have to compete with cash buyers. Hard Money Lenders should be there for you and if you are a customer produce an AS Good as CASH Proof of Funds

Invest in your future with Gauntletfunding today

Gauntlet Funding is a New York-based private funding group comprised of experienced and knowledgeable industry professionals who specialize in direct private lending and distressed asset financing. If you’re considering commercial real estate investing, call Gauntlet Funding today at (631) 465-2161 to start your new financial future.

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