There are more regulations and conformity in institutional or conventional lenders than private money lenders regarding business purpose loans. This results in a wide variety of private money lenders who differ in their cost of capital, how they underwrite loans, and the quality of service they provide.
Here are five reasons why borrowers find value in private (hard) money lenders:
- Close Loans Fast – Often, borrowers don’t have weeks or months to wait to acquire or refinance a property with conventional lenders. Most private money lenders can close a loan in a matter of days if needed.
- Facilitate Added Value – Often, when purchased or refinanced, a property is in transition, i.e., not stabilized, has deferred maintenance, construction is required, or the property is to be remodeled for the added value. Unfortunately, many conventional lenders don’t recognize or won’t accommodate these needs.
- Make the Loan Process Easier Than Conventional Financing – A borrower often uses private (hard) money to avoid the cumbersome underwriting and extensive documentation requirements of conventional lenders that often prohibit them from accomplishing their goal or qualifying for the loan.
- Offer Creativity in Structuring Loans – Private money lenders can be creative and flexible in structuring loans, i.e., cross-collateralizing a loan with multiple properties for increased leverage, which many conventional would not do.
- Provide Short-Term Financing – Most private money lenders provide loan terms (three years or less) to help the borrower achieve a specific goal within a short period, i.e., complete the remodel or construction, stabilize the property, meet a quick deadline.
Wise investors look at the big picture when analyzing the feasibility of a real estate investment opportunity and consider private (hard) money financing as one tool in accomplishing their goal. However, not all private money lenders are the same, which requires you to know what you value most in achieving your goal to find which lender best fits your needs.
I am John Lloyd President & CEO of Fidelis Private Fund. We are a private money direct portfolio bridge lender specializing in commercial and residential real estate investment loans, short-term 1-2 years ranging from $100K to $2,000,000. We also help arrange long-term take-out financing as an exit strategy for the short-term loan.
Fidelis is a smaller lender where every borrower deals directly with the decision-maker, relationships are more important than rules, and common sense underwriting trumps a bureaucratic checklist. The result is a quick, hassle-free loan closing process.
Fidelis is structured as a mortgage fund, allowing the fund manager the flexibility to make decisions in the best interest of both our borrowers and investors.
Fidelis is primarily a local or regional lender making most loans within San Diego County or Southern California. As a result, we intimately know the market for quicker underwriting decisions at less cost. We do have the flexibility to lend outside the local market, but only on a case-by-case basis and usually only when existing relationships are involved or exceptional circumstances warrant it.
Fidelis Private Fund offers borrowers a flexible alternative to conventional lending institutions. We specialize in fast and creative short-term bridge financing with a clear exit strategy to transition properties and add value, so at loan maturity, the borrower is in a position to either sell or refinance.
We exist to help our clients achieve their financial goals. When private money lending is determined to be the right fit for the borrower, Fidelis Private Fund is a quality source to be considered.
However, if the borrower’s loan is not a fit for a private lender, we have the resources and connections to help find the right lender to fit the specific need.
Fidelis is the one-stop-shop to accomplish our borrowers’ goals. Call us at 702-379-3468 to see how Fidelis can help you.