3 Advantages of Private Lending for Real Estate Investors

Before you can start investing in real estate properties, you must have prepared upfront financing. Finding funding through bank loans can be a challenge when so many banks require a laundry list of requirements to qualify for loans, though.

Private lenders can offer financing to help you get started when you can’t meet standard bank loan requirements. To learn more about the advantages of private lending for real estate investors, continue reading the article below.

Asset-Based Lending

One of the best advantages of working with private lenders is having fewer restrictions. While traditional bank loans often require formalities, private lenders are much more flexible with their financing options.

For example, private loans are asset-based. While traditional bank loans largely base their decision to approve loans based on financial credit history, asset-based lenders will instead offer loans based on potential property value.

If your credit history or financial background has made getting approved for bank loans more difficult, consider consulting with an asset-based lender instead.

Short-Term Loans

When you apply for a standard mortgage loan approval, these loans can often expand up to 30 years. However, if you’re investing in short-term real estate properties, these long-term loans will not be sufficient to satisfy financial needs.

That’s why a major advantage of private lending for real estate investors is the option of short-term loans.

Short-term loans allow investors to receive hard money to fund investments such as flix-and-flip projects. When investors use short-term loans to fund and repay their short-term investments, they have more freedom to expand their investments rather than paying off long-term loans at a slower pace.

Fast Loan Approvals

Traditional bank loans have several different steps of review before loans are approved. These layers of reviews can often create significant delays for investors who need hard money fast.

Since private lenders are asset-based and more flexible with their approval, investors are more likely to receive approved loans from private lenders quickly.

Having access to a fast approval for loans is vital for investors who are closing on rental properties and other high-demand property investments.

Before real estate investors apply for traditional loans, we recommend considering a private loan instead. These asset-based, short-term, and rapidly approved loans will give investors the hard money they need to close on properties.

Here at LJC Financial LLC, we offer some of the most flexible and resourceful private loans in Texas. We provide hard money and financial guidance to ensure investors feel confident about their loan approvals. To learn more, browse our website.