What is Private Money in relation to real estate?

Question

I am looking for information about investing in real estate with private money. I have heard the term and have seen a definition of it that says it is money that is loaned by a private organization, and not a formal one like a bank. Still seems a bit vague to me. Any clarification would be appreciated.

Answer 1

Private money loans are just that--loans by an individual or institution, not a conventional mortgage company or bank. The most common one is a "hard money" loan. Easy to qualify for because credit and income are not important. Hard money lenders will normally lend up to 70% of the ARV (after repair value). The interest rates are very high--but most investors only use them for short term deals like flips.

Rick
www.fairwaymortgagelending.com

Answer 2

I got an interesting e-mail the other day about this kind of money. A company in Arizona lends "hard money" to investors. Credit doesn't matter. Will lend 65% of ARV for 6 months. Loan is at 18% interest. Amortized for 30 years. Balloon in 6 months.

This is for investors who want to do flips. If the house looks good enough to them, it would end up being a 100% purchase loan. Hard money is more expensive than hard water!

Answer 3

Funny that each one that you're speaking approximately used to be happening below the Clinton management. Enron used to be doing all its humorous industry with the approval of the Democrats. Our power problem is straight concerning the truth that liberals block and hamstring each efford to achieve any degree of power independence. As some distance as Foreign family members is involved, I did not see any gigantic earnings by way of the Democrats all through the 90s, except you wish to rely attacking Serbia as a gigantic win. Our financial system did not begin falling till the Democrats received manage of congress. any connection there?