Private money loans for Real estate are Replacing Big Banks: 3CALoan
Why Private Money Loans Are a Good Choice
For last few years Private money loans for real estate have given more easily available access to funds for investments than many of the largest U.S. banks. Non-traditional funding options include crowdfunding, Private money or hard money lenders, and individual investors. With Private Money, the collateral for the loan is seen, many times, as at least equally as important as the borrower’s qualifications. It also provides more flexible underwriting guidelines as compared with Bank loans.
The loans are basically based on upon current or future Loan to Value (LTVs) for a potential cosmetic “Fixer Upper”. It is also to deal with major renovation or construction repairs. In many cases, you don’t need to provide your full documents such as your income details or asset requirements or your past tax returns.
Private Money Loans Excellent for Fix & Flip
Private money loans for Real estate is a better option than government-backed or insured financial institutions because they offer loan much faster and it is best for “Fix and Flip” or “Fix and Hold” residential deals. There is a large difference in funding the loans between government-backed and private money. It will take one or two weeks for private money sources and a few months for government-backed.
Private money sometimes may fund the loan in just a week. It just requires work to be completed online i.e., real estate contracts, third party reports, escrow, loan, title, etc. Generally, sellers don’t want to wait for few months to sell their home and close escrow. It is usually due to a large number of potential buyers for the property. The faster an investor can have access to funds, get qualified, and close escrow on a potential deal, the better. Furthermore, it will enable them to get their purchase easily at the lowest offer prices possible.
Private Money Solutions vs. Big Banks’ Derivatives
Private money loans for Real estate have an option known as “Crowdfunding”. In Crowdfunding an investor asks to contribute to either a small or large number of people and they usually originate from the online community. Crowdfunding is one of the best options for people to invest in Real Estate, either directly or indirectly. Crowdfunding has also been used by many Charities to help pay the Healthcare costs for family members in need or to raise awareness for more individuals or group of people. Even computer designers use crowdsourcing to share free software code.
Who Reaps The Profits: Banks or Investors?
Instead of the Big Banks obtain all of the financial rewards related to their own Real Estate investments while still providing their bank customers interest rate between 0% to 1%. Crowdfunding and other private equity or debt options allow investors to share in the profits too. Crowdfunding has a variety of investment options and financial solutions for Debt or Equity investors. It has low risks and much higher returns than with investing their funds with their local bank branches.
In order for quicker lending or investment options, more buyers and sellers are matching up online through the internet, Social Media, real estate networking and investing groups. They also have a better access to real-time Big Data. 3CALoan can help you find a mortgage loan fitting your personal and housing needs. Our talented team can help ease the process of funding a loan. We help our customers every step of the way. We prioritize informing and educating our clients about the home buying process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. To find out more information about Private money loans and how we can help, contact us at (818) 322-5626.