A private money loan is basically considered a cash sale by the Seller, making the possibilities of closing the deal more certain. The offer is still considered a loan, but it comes with several benefits that both parties will appreciate:
1. No loan contingencies, since the borrower and property have been fully vetted before you write the offer.
2. No appraisal contingencies. Although the borrower can order one, the offer is not dependent on the outcome, since most private money loans require a sizable down payment.
3. Quick closing. Private money loans have been known to close in a much shorter period of time than traditional lenders and banks. It is reasonable to close in 10-15 days as opposed to a month or longer.
4. Property condition is not as great a concern. Less than pristine properties are easier to purchase with private money since this type of loan is considered “all cash” and is based against equity or loan to value.
Private money, also known as hard money loans, can be a viable option in the real estate financial world and are of considerable interest to Borrowers, Sellers and Investors today.
If you or someone you know is interested in getting such a loan or have further questions, call me at 707-523-2099 and I’d be happy to help!