Unlike a bank loan, a hard money loan is easy to hands-on. How? Because it is offered by private money investors, also known as private money lenders. But that’s not just about it. Private money lenders provide this loan through a non-institutional (non-bank) structure, and the lenders are either individuals or companies. The money they lend comes out safe and sound. More importantly, it is secured by a deed of trust and a note—to run a framework of real estate funding.
Spot A Difference Between Type And Type B
To determine this, you must first understand the difference between private money investors ( type A) and hard money lenders (type B). Briefly, both money lenders are designated for real estate funding. Still, the two set different expectations in the mind of individuals and businesses who are aiming to make large real estate purchases without paying the entire purchase price upfront. Private money investors lend “private money.” The advantage of borrowing money from Type A is you can control the money your way. It means no interference from the investors offering real estate funding. It is possible as long as the investors receive a specified amount of return on the money they lend, they don’t worry about the significant details of the business arrangement
In contrast, hard money lenders lend “hard money.” Hard money signifies that the lender has granted with additional control over money expenditure. Contrary to private loans, hard money lending loans are only applicable to specific real estate projects. Even after the real estate funding is guaranteed, the investor does scrutiny to make sure that you are entirely spending on the approved deals.
When you want to do a trial with a private money investor: following are the five steps to remember.
5 Steps to Getting Real Estate Funding From Private Money Investors
- Locate A Private Money Investor
Private money investors exist in two forms: family and friends. They roll the money into your account smoothly as they are the authentic experts in the lending business. The best way to find a reliable private money lender is to conduct your research, seek referrals from friends and family, and get opinions from other real estate investors.
- Contact The “One” Private Money Investor
After assessing three to five potential investors, waste no time, and contact the one that matches well with your current fiscal requirements. Write to them in an email that you are a real estate investor looking for people who are dying to receive a good return on their money secured by real estate. The next step should involve chatting consist of further real estate funding.
- Bring Your Plan Along On The First Meeting
Chasing success is all about working hard and intellectually. You are going nowhere towards it if you lack a flourishing business plan. Set up a plan and describe what types of properties you buy, how you aim to improve them, and theories to sell them. Also, outline the profit margin you foresee.
- Attach Proof Of Past Projects
Private money investors love this very much and taking care of it; you need to prove that you indeed have experience in the industry and are familiar with similar deals. Add attractive visuals and details about your past projects, including timelines and numbers.
- Prove That The Investor’s Money Is Secured
You need to show real estate funders that their loan will be secured with the first lien deed of trust. For this purpose, you need to be backed by an attorney to draw this up every time you plan for the loan.
So, private money investors or hard money lenders? Luckily, we’re both and so much more or less but much better than banks. We assure you great peace of mind by offering you flexible hard money in the various counties of Florida, including Broward, Miami-Dade, Orange, and Palm Beach counties in Florida.
Call us today at (561) 609-6699.