Since the recent down turn in the housing market and the collapse of so many mortgage institutions obtaining loans for real estate investing has become more difficult than ever. Fortunately, for those intent on taking advantage of the many great deals available private money lenders can be a powerful tool to enhance your real estate investing.
Private mortgage lenders and hard money lenders are now more than ever key to successful and consistent real estate investing. These lenders fall into a couple different categories, yet they are all great for getting deals funded quickly. There are hard money lenders who are more like traditional mortgage institutions that lend based on the current equity in the property. Rehab lenders will not only loan the acquisition funds needed based on the ARV (After-Repair-Value), but will also lend the money required for repairs, making flipping houses a breeze. Then there are private money lenders who act as transactional lenders and will fund your deals for flipping homes at closing.
As with the rest of the mortgage market for real estate investing many private mortgage lenders have also tightened up their lending criteria. It used to be that as long as you had a pulse and there was equity in the home you could get a loan. Now some of these lenders may require a credit report or proof of some assets. However there are still some that will loan strictly based on the equity of the property. Building a good relationship with these private mortgage lenders will make your real estate investing much easier. Knowing that you have easy and instant access to the funds you need to close in days means you can make offers with confidence and often beat out competitors and still get lower prices on homes.
