225,526
The advantage is they can do loans others can't. The disadvantage is your buyer will have a much higher interest rate. Make sure that your buyer can't get any approval before going to a private investor. Many times I've gotten customers who were turned down at banks and other well known mortgage brokers and I figured out a way to do it without going to private investors.
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Ryan Huggins - Thousan...
Thousand Oaks, CA
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Dennis Swartz
Columbus, OH
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Michael Setunsky
Woodbridge, VA
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Lyn Sims
Schaumburg, IL
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Nina Hollander, Broker
Charlotte, NC
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Bob Betel
Sweetwater, TN
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Debe Maxwell, CRS
Charlotte, NC
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Roy Kelley
Gaithersburg, MD
5,230,113
Exactly what Bob Betel said - they can also be a royal PITA!
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Dennis Swartz
Columbus, OH
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Lyn Sims
Schaumburg, IL
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Bob Betel
Sweetwater, TN
1,712,676
Fro ya?
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Dennis Swartz
Columbus, OH
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Roy Kelley
Gaithersburg, MD
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Michael Jacobs
Pasadena, CA
2,684,109
Easy to qualify.
Loan shark interest rates.
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Lyn Sims
Schaumburg, IL
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Nina Hollander, Broker
Charlotte, NC
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Roy Kelley
Gaithersburg, MD
3,727,873
Sometimes they'll do loans that traditional lenders won't.
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Will Hamm
Aurora, CO
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Nina Hollander, Broker
Charlotte, NC
2,224,473
There are more disadvantages than advantages. At least in most cases I've come across. I see scenarios like interest only loans for a period of three years with the balance due at that time. The interest rates are very high.
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Dennis Swartz
Columbus, OH
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Nina Hollander, Broker
Charlotte, NC
3,988,007
It will almost always be at a higher interest rate than the banks. I had a friend who couldn't get financed any other way and a local investor gave her the whole amount at above market rates. It made them both happy so it served a purpose.
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Lyn Sims
Schaumburg, IL
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Nina Hollander, Broker
Charlotte, NC
5,772,575
Seanna,
Bob Betel expressed it perfectly. A
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Lyn Sims
Schaumburg, IL
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Roy Kelley
Gaithersburg, MD
711,852
The advantage includes a buyer being able to finance a property that they and/or the property may not qualify for. The disadvantage is interest rates are typically much higher than conventional financing - and since the buyer will not qualify for traditional financing, are they getting in over their head? And what may be the issues with the property?
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Will Hamm
Aurora, CO
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Roy Kelley
Gaithersburg, MD
4,572,283
One advantage:
If a buyer/borrower can't qualify otherwise, a private investor may be able to help.
One disadvantage:
The rates may be higher.
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Dennis Swartz
Columbus, OH
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Nina Hollander, Broker
Charlotte, NC
4,800,082
A private investor can fund someone who has difficulty getting a conventional loan, but it will most likely be considerably more expensive.
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Nina Hollander, Broker
Charlotte, NC
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Roy Kelley
Gaithersburg, MD
1,502,998
Bob Betel has the exact answer I'd have given. They do loans others can't but like a Shark on Shark Tank, they charge a premium for the value they bring.
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Bob Betel
Sweetwater, TN
213,263
Control is lost...advantage is easy source of money
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Dennis Swartz
Columbus, OH
1,466,207
Seana Johnson Bob Betel has a good answer for this one.
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Bob Betel
Sweetwater, TN
4,434,127
5,104,931
3,071,489
815,253
Happens here all the time with Flippers, They pay an ave rate of 8% but for us its nice Cash deal with quick close.
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Nina Hollander, Broker
Charlotte, NC
4,272,548
6,393,609
Most of my early investments were financed by private investors.
Quick, flexible and able to get the job done.
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Nina Hollander, Broker
Charlotte, NC
7,836,419
Some home buyers do not qualify for normal mortgage financing and other investor can help fill that gap. This financing often has a premium price.
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Nina Hollander, Broker
Charlotte, NC
509,449
If I'm the seller I would probably grow weary, how financially strong is the buyer? Who is this private lender?
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Roy Kelley
Gaithersburg, MD
3,345,091
Likely more expensive yet good for those who do not qualify for a loan with a conventional lender.
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Nina Hollander, Broker
Charlotte, NC
3,986,258
I have two and they are real good to work for, but not all of htem are. Some just take advantage of the buyer and that is what I look for.
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Roy Kelley
Gaithersburg, MD
5,868,554
Some buyers have issues with their credit, and having a private investor may be the only way they can purchase.
1,622,432
It is your client decision. If they agree to pay a higher interest rate, I'm totally fine with any approved financing.
1,725,996
In the long run, more disadvantages, since private investors demand a higher finance rate.
5,583,278
If the terms, conditions and rate of the loan are reasonable, private financing can be a score.... if a buyer has a relationship with a private lender, and that buyer buys fix and flips, that's powerful....that's a quick closing....
if it's an owner occupied situation, and the rate is a good one, that too is a score.... and a quick closing....
182,915
Private investor's loan totally different way of lending but still they have to follow some guideliens also. These loans are good for shorter term and should have back up plan for your clients.
4,936,705
4,882,355
Advantage poor credit risk might get a loan. Disadvantage going to pay more.
5,049,466
The pro is getting financing for a purchase that other lenders will not touch, but the downside is a higher, perhaps much higher, interest rate. Process and terms and conditions may be more complicated
1,617,916
921,504
Pros - assurance of closing
- quick close
- banks not involved
Cons - Assurance, speed and ease cost more
3,416,038
It is great for buy, fix and sell and should never be used for owner occupied or if you do not have an exit strategy
1,844,301
What if you have to foreclose? It's a long & lengthy process depending on your state. Not for the feight of heart as you have to throw kids out on the street.
1,157,785