Many investors rely solely on private lending to purchase properties. You can go for this method, or combine private loans with traditional bank financing to get the capital you need.
If you have not worked with a private lender, we can help you understand what to expect when using private lending in TX.
We have put together a few things you should know about private lending. Ii may not work for everyone, but for real estate investors, private lending can be just the thing they need to see great profits.
Here’s what you can expect when using private lending in TX
Typically a less stringent and faster approval process
Many investors are attracted to private money loans as the ability to qualify is often much more lenient. Private lenders are looking more at the project you want to finance, then they are at you.
The loan is typically backed up by the property being purchased. This allows people with lower credit scores to still have the ability to flip a home. If the lender sees very clearly that you are making a great deal, they will be quick to finance you as they know they will see a timely return.
Expect to repay the loan quickly
A typical mortgage will take around 30 years to repay. A private money loan is typically paid back in months, not years. Private lending is usually expected to be repaid over a short period of time.
Private lenders expect quick returns, they aren’t set up as a bank is, where they can be paid back over the course of 20 years. This is ideal for someone flipping homes. You can get quick access to the cash you need, and be expected to pay it back quickly too.