Seana Johnson, Coming back to my roots - renewing RE Lic (AgentProfesor)

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Rainer
225,515
Bob Betel
Allstar Home Mortgage, Inc. - Sweetwater, TN
President, Allstar Home Mortgage, Inc

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.

Dec 10, 2016 03:14 PM
Ambassador
4,516,932
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Exactly what Bob Betel said - they can also be a royal PITA!

Dec 10, 2016 04:20 PM
Rainmaker
1,708,235
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Fro ya?

Dec 10, 2016 02:43 PM
Ambassador
2,605,988
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Easy to qualify.

Loan shark interest rates.

Dec 10, 2016 02:40 PM
Ambassador
3,724,077
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Sometimes they'll do loans that traditional lenders won't. 

Dec 10, 2016 08:19 PM
Rainmaker
2,224,167
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

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. 

Dec 10, 2016 08:09 PM
Ambassador
3,986,960
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

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.

Dec 10, 2016 06:29 PM
Rainmaker
5,767,433
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Seanna,

Bob Betel expressed it perfectly.  A

Dec 10, 2016 04:02 PM
Rainmaker
602,735
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

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?

Dec 10, 2016 02:55 PM
Rainmaker
4,247,770
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

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.   

Dec 10, 2016 02:53 PM
Rainmaker
4,799,701
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

A private investor can fund someone who has difficulty getting a conventional loan, but it will most likely be considerably more expensive.

Dec 10, 2016 01:56 PM
Rainmaker
1,426,350
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

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.

Dec 12, 2016 11:09 AM
Rainer
213,213
Dennis Swartz
Full Circle Property Management - Columbus, OH
MBA, GRI...experience counts!

Control is lost...advantage is easy source of money

Dec 11, 2016 07:09 AM
Rainmaker
1,466,027
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Seana Johnson Bob Betel has a good answer for this one.

Dec 11, 2016 06:31 AM
Rainmaker
4,433,809
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Bob has a good answer.

Dec 11, 2016 04:38 AM
Rainmaker
4,443,903
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Have never done this in 25 years.

Dec 11, 2016 04:26 AM
Rainmaker
3,070,784
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Have never used one

Dec 11, 2016 04:05 AM
Rainmaker
756,787
Paul Antonelli
Antonelli Realty - Saint Cloud, FL
Broker Owner; Antonelli Realty

Happens here all the time with Flippers, They pay an ave rate of 8% but for us its nice Cash deal with quick close.

Dec 11, 2016 03:07 AM
Ambassador
3,950,968
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

Finding one!

Dec 10, 2016 10:26 PM
Ambassador
5,709,992
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Most of my early investments were financed by private investors.

Quick, flexible and able to get the job done.

Dec 10, 2016 05:35 PM
Rainmaker
6,978,633
Roy Kelley
Retired - Gaithersburg, MD

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.

Dec 10, 2016 04:12 PM
Rainmaker
508,854
Susie Kay
Ultra Real Estate Dallas Fort Worth - Plano, TX
North Dallas Specialist

If I'm the seller I would probably grow weary, how financially strong is the buyer? Who is this private lender? 

 

 

Dec 10, 2016 03:16 PM
Ambassador
3,148,189
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Likely more expensive yet good for those who do not qualify for a loan with a conventional lender. 

Dec 10, 2016 02:36 PM
Rainmaker
3,986,000
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

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.

Dec 10, 2016 02:04 PM
Rainmaker
5,275,281
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Some buyers have issues with their credit, and having a private investor may be the only way they can purchase.

Dec 12, 2016 02:15 PM
Rainmaker
1,550,180
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

It is your client decision. If they agree to pay a higher interest rate, I'm totally fine with any approved financing. 

Dec 11, 2016 07:26 PM
Rainmaker
1,668,226
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West - Carlsbad, CA
Presence, Persistence & Perseverance

In the long run, more disadvantages, since private investors demand a higher finance rate.

Dec 11, 2016 02:44 PM
Rainmaker
5,580,084
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

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....

Dec 11, 2016 02:41 PM
Rainer
180,515
Harjeet Bhatti
FITH THIRD BANK - Chicago, IL
Home Mortgage Consultant 25 States

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.

Dec 11, 2016 01:50 PM
Rainmaker
4,287,856
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Quick closing is a major deal. 

Dec 11, 2016 11:22 AM
Rainmaker
4,310,891
Richard Weeks
Dallas, TX
REALTOR®, Broker

Advantage poor credit risk might get a loan.  Disadvantage going to pay more.

Dec 11, 2016 09:42 AM
Ambassador
4,725,873
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

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

Dec 11, 2016 08:41 AM
Ambassador
1,616,454
Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Quick close with nice terms

Dec 11, 2016 08:00 AM
Rainmaker
915,098
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

Pros - assurance of closing

        - quick close

        - banks not involved

Cons - Assurance, speed and ease cost more

Dec 11, 2016 05:28 AM
Rainmaker
3,377,305
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

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

Dec 11, 2016 05:19 AM
Rainmaker
1,760,639
Lyn Sims
Schaumburg, IL
Real Estate Agent Retired

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.

Dec 11, 2016 05:15 AM
Rainmaker
1,157,535
FN LN
Toronto, ON

It depends on the specific transaction and parties to the transaction.

Dec 10, 2016 07:45 PM