Regarding real estate investment or financing the purchase of your dream home, traditional lending options aren’t always the best fit. Private loans offer a flexible option for both investors and borrowers. There are many benefits to taking a private real estate loan instead of a more traditional one.
1. Evaluate the Property’s Potential
According to the May 2021 RCA CPPI: U.S. summary report, commercial real estate prices rose 1.3% annually from April 2020 to 2021 nationwide. That’s why it’s wonderful that private lenders look at more than just the property’s current market value. These individuals also consider the property’s potential when deciding if they will approve you for a loan.
2. Quicker Approval
Banks and other financial institutions are known for their slow approval processes due to the mounds of paperwork and multiple departments loan applications may have to go through. A private lender doesn’t have to jump through the same hoops, ensuring that real estate loans are approved and funded quickly. This allows investors to capitalize on great real estate investment deals before the competition.
3. Flexibility and Customization
Large financial institutions are often bound by the terms and conditions set forth by that institution, but that’s not something that those in charge of private real estate loans have to deal with. Instead, they can re-write the contract, allowing you to help customize your loan terms. You can negotiate interest rates, repayment options, or interest payments to suit your needs. This flexibility and opportunity for customization allow budding entrepreneurs to build their businesses without going broke to make loan payments to a bank.
4. Bad Credit Accepted
One critical thing that many lenders check before approving a loan is a person’s credit history. However, many companies that offer private real estate loans are more flexible regarding a person’s credit score, making this a great choice for anyone with a bad credit history. Often, this will include asset-based lending, meaning that the property value will be used to determine whether you qualify for a loan instead of your previous payment history.
Private loans continue to increase in popularity because they offer key opportunities for borrowers and investors. Reach out to us today to apply for your real estate loan!