Lending / Borrowers / Lenders
Private money lending is a loan from a private financial entity to a non-owner occupied real estate investor, secured by real estate as collateral.
Rates, and terms, for these types of loans will vary by lender and depending upon their experience, level of the power and the length of an investors relationship with a particular lender, and the perceived risk of the deal being borrowed for.
There are very few hard and fast rules to private money.
Private lenders look at an appraised value, borrower experience, property equity, and “exit strategy.”
Institutional lenders normally take 60 to 90 days to fund a transaction, whereas private lenders review the properties merit, require less paperwork, and can complete the loan funding in as little as 72 hours to 3 weeks.
Institutional lenders normally cap the amount of money on a capped amount of loans.
Private lenders can lend multiple loans on multiple properties, lend more money so that borrowers can use less of their own funds with far fewer seasoning requirements.