Private Money Lending
You bring the deal and we will provide the money!
WHAT IS HARD MONEY?
It goes by a lot of different terms. You’ve probably heard it referred to as, “Private Money,” “Equity-Based Financing,” “Bridge Financing,” or “Creative Financing,” and for the most part, they all mean the same thing.
It’s non-traditional financing that relies on the property’s merits, rather than your personal qualifications. These types of loans are often secured by a note and deed of trust in first lien position on the property.
This means, if you have a great deal, you can find the money to do the deal and Blue Oceans Funding wants to be your funding source!
How to Secure Your Funding
Because the funding process will most likely go quick once you begin and because the loan will be secured by the property in question, the most important thing that needs to be done first is finding and securing the property you want to invest in. Without the property being under contract, the lender will not want to invest time in working with you without a specific property to work with.
5 REASONS WHY INVESTORS USE PRIVATE MONEY
There are 2 opinions about private money, just like with everything else, some love it and some hate it. But the fact is, private money is a tool, when used correctly, it is an invaluable part of the real estate investment business. There is a time when it is just what is needed and there are situations when some other solution will be a better fit.
- Fast Funding: Time is money in the real estate business. Unlike traditional loans that can take weeks or even months, private money loans can be processed and funded within a few days or a couple weeks.
- Bad Credit? No Problem: Private money loans don’t need you to have good credit, the property that is going to be backing the loan is the only thing that will be looked at to make sure it qualifies.
- Real People Lending Money: People with money sitting in low paying CD’s and other investments are looking for better opportunities for their money which is where you come in with your real estate flip. It’s a win win for both sides.
- Creative Opportunities: Banks stay away from loaning money for fix and flip projects but private investors love this kind of opportunities. This is why they are able to provide creative funding solutions.
- Flexible Terms: Traditional loans are bound by strictly-enforced guidelines. Private money lenders understand this business better and are more willing to work with you to create a loan that works for your project. With a proof of funds letter showing your ability to offer cash (Which we can provide) you can have the confidence to submit many offers and find the perfect deal. Once you have the property secured and have done the proper due-diligence, we can move quickly to get your deal funded!
WHO USES HARD MONEY?
There is this misunderstanding that the only people who use hard money (or OPM) are the people who have bad credit, bankruptcies, short sales, and foreclosures on their record and can’t get access to cash any other way. While this is true in some circumstances, many very successful real estate entrepreneurs use hard money each and every time they buy a property.
Why would real estate investors with liquid and sizable cash reserves on hand still prefer to use OPM (Hard Money Loans) every day of the week? Why would heavy-hitters, with gobs of personal cash, regularly use OPM?
Habitual, hard-core Deal Makers understand that if they leverage their own cash reserves, they simply tie up their own money for 6-12 months. This makes it impossible to buy more properties based on the amount of money in their bank accounts, which serves as proof that they can service loans on varying cash-flowing properties.
By leveraging OPM, they keep their own money liquid, which means they can do more deals, more often!
