Also known as a bridge, rehab, or hard money loan, a private money loan is a very specific type of financial instrument offered by private lenders. Since the money is lent on the basis of property equity instead of existing assets or credit score, borrowing hard money is often favored by property investors.
As a matter of fact, there is a large number of reasons you might consider a private money loan over a conventional bank loan. Here are just some of the types of people who would benefit greatly from borrowing from Los Angeles hard money lenders.
Those Who Can’t Wait
When they see a bargain in the real estate market, they have to strike quickly. If they wait months for a bank to pre-approve their loan, then some other buyer might grab it before they do. With a typical turnaround time of only 7-15 days for approval, a hard money loan is perfect for them.
Those Who Know the Art of a Deal
Cash is still king in a large proportion of business transactions, and these borrowers know that. Providing extra bargaining leverage and—in many cases—heavy discounts, these borrowers know that a hard money loan can give them the upper hand.
Those Who Have a Plan
Fix-and-flip property sales can be risky, but not to those who know what they’re doing. That’s why their preferred source of capital is a bridge loan, which generally has terms of one year. They’re easier to navigate and calculate than a bank loan, making them perfect for the short-term borrower who knows exactly what their returns will be.
Those Who Have Their Capital Tied Up
Just because they’ve extended their capital in many directions, it doesn’t mean these investors and business owners are going to suddenly stop growing. If their capital is tied up in other deals, investments, and assets, and a bank is reluctant to extend further credit, then a bridge loan is a perfect way to access extra capital and keep growth on track.
Those Who Need a Fresh Start
They’ve fallen prey to the traditional lending industry, which dictates that once you’ve made one poor investment decision, you’re never allowed to climb back out of that hole. Credit history is largely unimportant in the world of private lenders, meaning that after an unforeseen bankruptcy, short sale, or foreclosure, these borrowers can quickly get back on their feet.
Those Who Are Doing It for Themselves
They’ve never played by anyone’s rules. In fact, they’ve always been self-employed, which makes it difficult for them to secure funding from a regular financial institution. Reputable private money lenders are not your average lender, though, which allows these mavericks to keep borrowing, keep investing, and keep living their dreams of financial freedom.
Those Who Want to Grow Their Wealth
Growing your wealth quickly and organically will almost always require capital. Increasing that fund pool through a traditional bank loan, however, is not only frequently difficult but also puts you at a disadvantage.
If you need an alternative loan that serves you better, look no further than Equity Wave Lending, one of the best private money lenders in Los Angeles. Providing fast and trustworthy loans with highly competitive rates to all kinds of borrowers, we’ll help you achieve your financial goals and grow. Get in touch with us on our website or call 1-888-399-8881 to find out how.