| As an investor one of the most important things | | | | much faster than with a private lender. A private |
| that you'll want to realize is that banks are not | | | | lender will not be as worried about your credit and |
| the only place that you can turn for loans. In fact, | | | | they will be willing to work with you to stay in |
| there are many people who are willing to invest in | | | | good standing with the payback of your loan. In |
| the idea that they, too will profit financially from | | | | some cases, you may be able to borrow the |
| the investment. If you are seen as a good | | | | entire amount of investment into the property |
| investment, in other words, they feel that you | | | | including any necessary repairs or updates and |
| can give what you're promising; they will be willing | | | | pay the entire amount of the loan back when the |
| to invest in you without the traditional hassles of | | | | property has been sold. No bank or hard money |
| going to the bank for such a loan. | | | | loan will allow this type of term. |
| A private lender may be a wonderful source for | | | | Some may think that this all sounds great if you |
| money for your investment idea. The biggest | | | | can find a private lender willing to work with you. |
| difference between a private lender and a bank is | | | | There are more places to look than you may |
| the fact that a private lender is looking into the | | | | think. A good place to start is with the local |
| investment more than your credit history. A bank | | | | investor's association. Most areas should have |
| sees the idea, but is really more interested in your | | | | some association made up of local investors. Since |
| credit standing and your debt to income ratio. If | | | | these people have been in the investing game for |
| they feel that you, the person, are a good credit | | | | some time, probably, at least some of them may |
| risk; that you will pay back your debt regardless | | | | have had dealings with a private lender. If you can |
| of the success of the business, they will approve | | | | find some that have, they can also give you |
| you for the loan and this will be the beginning of a | | | | some tips as to how to appeal best to the lender. |
| long process. A private lender on the other hand | | | | They will know what's important to the lender and |
| will like to see a good credit rating and | | | | what things they would like emphasized. This will |
| debt-to-income ratio, but they will place their | | | | help you to land the loan you're looking for. |
| focus on your business idea. If they feel that your | | | | Some other places you may want to ask around |
| idea will bring large profits, even if your credit isn't | | | | about private lenders are your local professionals. |
| perfect, they may be willing to invest in that idea. | | | | Local doctors, lawyers, or dentists, may be |
| If they decide to invest, they can usually get you | | | | private lenders themselves, or they may know |
| the money within a few days. This is much | | | | people that are. They may be able to again tell |
| shorter than the process you'd have to go | | | | you exactly what they or their acquaintances are |
| through with the bank. | | | | looking for in a business proposal. They will give |
| Another tremendous benefit to a private lender is | | | | you tips as to how to present your business plan |
| the fact that through discussion with you the | | | | and what kind of things included will get you the |
| amount that will be borrowed will be decided upon. | | | | loan you're looking for. |
| If you find later that you need more money for | | | | Friends and family would be the next area that |
| some unexpected problem with your investment | | | | you may want to investigate. You may think that |
| such as re-wiring a house or something along | | | | you'd know if they could help you, but you may |
| those lines, a private lender can do that with a | | | | be surprised. Your aunt's cousin's sister-in-law's |
| little conversation rather than another long drawn | | | | little girl may have had a teacher that does |
| out loan process. The terms for paying the loan | | | | private lending. It's always possible so if you're |
| back will be more flexible with the private lender | | | | thinking of putting together a business plan and |
| as will the flexibility of those terms. If you run into | | | | investing in some real estate, commercial or |
| trouble in the repayment you can speak to the | | | | residential, be sure that everyone you talk to |
| lender and work out some short term solution | | | | knows about it. You may find that there are |
| until you are able to resume full payments. All | | | | people among those that you know that can help |
| decisions of repayment and terms will be | | | | you get exactly what you're looking for. |
| between you and the lender. | | | | A Google search will also help you when you've |
| The main benefit to the private lender to some is | | | | exhausted all other avenues. You can do a search |
| the ability to avoid a hard money loan. This type | | | | on "local private money lenders" in your area and |
| of loan (hard money) is one that caters nicely to | | | | the internet may just be able to give you a place |
| those that are having financial difficulty. They are | | | | to start. You can start calling around from there |
| willing to loan money to those that have credit | | | | and through talking to the first on the list, you |
| trouble or have had credit trouble in the past. The | | | | may be able to find the others. |
| good part of that is quickly dwarfed by the | | | | Wherever you find your investor, know that they |
| downside. A hard money loan will have very high | | | | are there to help you and themselves with the |
| interest rates and a strict repayment term. If the | | | | profits you are both looking for. Be sure that |
| loan is defaulted on, the hard money lender will | | | | there is paperwork between you and your lender |
| have the right to claim the property and sell it in | | | | and make sure you have only one lender per |
| order to recoup the loss of the loan. You will be | | | | property. That will help avoid confusion and may |
| putting yourself and the property you're investing | | | | build a lasting relationship between you and your |
| in at great risk through a hard money loan. The | | | | chosen lender. This will keep your profits coming |
| term of a hard money loan will come to maturity | | | | and make your lender money at the same time. |