Private Money Lending

Private Money is a commonly used term in banking and finance. It refers to lending money to a company or individual by a private individual or organization. While banks are traditional sources of financing for real estate, and other purposes, Private Money is offered by individuals or organizations and may have nontraditional qualifying guidelines. There are higher risks associated with private lending for both the lender and borrowers. There is traditionally less “red tape” and regulations.

We haven’t heard a lot about Private Money in the pandemic.  I thought I would reach out to a couple investors I know to see how they were doing. It is fascinating what I found! Funding is actually readily available as a lot of investors think the stock market is a little bit frothy and can earn a solid return lending out money at 7-9%. 

One thing that has changed in Private Money is rates have gone down. Typically, regardless of the conventional market, rates have been around 8.5-9% and sometimes higher! 

Due to rates being so low in the conventional markets a lot of Private Money investors have a 7 in front of the rate now.  I think we will be seeing a lot of odd properties with great opportunity coming on the market so I have a feeling this will be a growing segment of the business. 

Here are some of the uses: 

COMMERCIAL LOANS

  • Up to 70% of current fair market value
  • Terms of 2 to 25 years depending on borrower’s needs
  • No prepayment penalty

 

ODD PROPERTIES

  • Churches and religious buildings, gas stations, single purpose, industrial, vacant buildings
  • Terms of 2 to 25 years depending on borrower’s needs
  • No prepayment penalty

 

FIX-N-FLIP OR REHAB LOANS

  • Up to 85% of the Purchase Price + 100% of the Rehab Construction Costs, or 65 – 70% ARV
  • Terms of 1 to 3 years depending on borrower’s needs

No prepayment penalty

 

CONSTRUCTION LOANS

  • Up to 100% Construction Loan amounts
  • Loan amount not to exceed 65% of finished value of property

 

 REFINANCES

  • Up to 70% of current fair market value
  • Cash Out Refi Loan will require a Use of Funds letter
  • Cash Out needs to be used towards business purposes

 

 

For more information or to apply www.freshhomeloan.com or call or text 510.626.9100

Garrick Werdmuller

garrick@freshhomeloan.com
(510) 626-9100