Most private money borrowers fall into the following categories:
- Purchasing a fixer-upper to repair and flip in 3 to 6 months
- Purchasing a fixer-upper to repair and keep as rental property
- Refinancing to invest money in other cash flow opportunities
A private money borrower is someone who:
- Needs quick funding for time sensitive loans
- May have been denied a bank loan for any reason, including credit and excessive loan conditions
- Wants to avoid long hassles of processing a bank or institutional loan
- Needs a larger loan with more flexible terms than most banks offer
- Wants an opportunity to make an investment in a new property using the equity in their own real estate
- Cross collateralization that has circumstances making it difficult to obtain institutional loans
- Complex financing structures
- LLC partnerships
- Trust corporations
- Credit problems
- Minor to moderate bankruptcy (old or current)
- Property held in probate, trusts, family, limited partnerships, irrevocable trusts, corporations, etc.
- Divorce loan qualifying challenges (institutional lenders are very picky about the borrower and the property with divorce cases)