Not surprisingly, bank loans for real estate tend to dry up once the bank sees you’ve got more than a couple of properties. Banks are less and less interested in making investment loans when they feel there’s more of a risk. And the more you owe, the bigger the risk they assume you’ll be. Of course, the opposite can also be true. The more properties you’ve invested in either as a rental property or a rehab, the more you learn about the process of renting and rehab. The answer for most people is to look to private money lenders for real estate.
Private money lenders for real estate are investment businesses that specialize in investment property loans. The money comes directly from lenders who have the capital and know that real estate is a good investment. Private lending allows individuals, or groups of investors, to invest in people like you who are looking for rapid funding or a loan for an investment property.
Why Work with Private Lenders?
Private money lenders simply have a different metric for whether or not to lend you money. If you’re interested in rental property financing, but a bank has decided that you don’t need another property, a private money lender will look at the investment from a different angle. They’ll simply look at the property, the work that needs to be done, and the potential return on their investment. If they feel that you’re a good investment, they’ll give you a private money loan to help you make it happen.
What Can You Fund with Private Money Loans?
Private money loans can be used to fund the investment property that has been discussed between you and the lenders. You can get rehab loans or rental property financing. You can get private money loans for just about any kind of investment property imaginable.
In the long term, if you’ve done a lot of work on investment properties in the past, you’re probably a good bet for an investment property loan. Private money lenders for real estate understand that and will look at the specifics of your residential investment proposal in order to decide whether or not to give you a loan for an investment property. It can be much easier to get a private money loan than a bank loan, simply because you’re dealing with investors who understand the real estate market.