Private money lenders issue short-term loans to borrowers for purchasing investment properties or for construction and renovation, when institutional lenders and banks have rejected them. They’re known as hard money lenders, and they offer private money loans to borrowers looking for cash-out refinancing, quick funding, rehab projects or short-term fix and flippers.
If you’ve been searching for a reputable and licensed private money lender in California, there is only one safe choice, PB Financial Group. We have been in the industry since 2006 and offer competitive rates to borrowers with different prepayment penalty options.
Private money lenders, like PB Financial Group, offer loans that are secured by real estate assets, but these loans are generally used for purchasing a condo, multi-family building, or a home. Anyone can be a private money lender, as it can be an established lending institution or a friend. However, when people think about private money loans, they are generally talking about hard money lenders.
That’s because hard money lenders tend to give out short-term real estate loans that can be used to renovate or purchase a property. You can use hard money loans for long-term buy-and-hold investors or short-term fix-and-flip investors. There are three main degrees of private lenders, which is based on the relationship between the lender and the borrower. These degrees are:
Hard money lenders are known as “third-party” private lenders, and they’re the best option for private loans as they have standardized interest rates, loan terms, fees, costs and are the most reliable.
Short-term fix-and-flippers are the ones who take the most advantage from private money lenders since they’re short on time and are an all-cash buyer. Long-term investors can also take advantage of private money lenders, especially those who want to rehab a rental property before they use a property for refinancing or put it into a permanent mortgage.
The following types of borrowers stand the most to gain by working with private money lenders:
Private lenders generally issue loans to short-term investors who’re looking to make money by flipping houses. They also issue rehab loans, along with traditional hard money loans so that buy-and-hold investors can buy and renovate a rental property.
The bottom line is that private money lenders are non-institutional banks that offer private money loans, which can be secured by real estate assets. They are also known as hard money lenders and you can use private money loans to finance the renovation and purchase or investment properties.
If you want more information on hard money loans or private money lenders, get in touch with PB Financial Group today.