What Is Private Money?

By alex.capitalfundings@gmail.com | December 3, 2018

What is Private Money?

Private money is a financing term used by the real estate industry to describe real estate-secured loans that offer many advantages to the traditional bank mortgage.Private money can be lent by any individual person or business entity, but real estate investors typically receive private money loans from institutions that cater to this niche, such as Capital Fundings LLC.

At Capital Fundings LLC, we specialize in private money loans. Using funds we receive from our network of private investors, we provide private money loans that give real estate principals the flexible financing they need to quickly close deals.

Our typical financing arrangement works as follows: we lend funds through a typical promissory note arrangement. The property you wish to acquire with the financing secures the loan, making the financing similar to a bank mortgage. We offer interest only loans, as well as loans with a 5 year amortization. Our notes can be rolled over after the 5 year period.

Why Choose Private Money Over A Traditional Mortgage?

If you are a real estate investor, you may be wondering why private money could be preferable to a traditional mortgage.Private money works just like a traditional mortgage (secured loan, set interest rate/amortization terms). Why should I consider this alternative financing option?

There is a key reason why private money may be the best financing option for you: flexibility. Traditional mortgages have long approval and processing time, which may cause you to lose many great opportunities!

Private Money WILL Allow You To Make More Deals

If you are starting out as an entrepreneur in real estate, it may be tough to get the financing you need for your first few deals. Traditional banks and mortgage lenders may not have the confidence in your nascent track record to give you the credit you need to maximize deal flow. While you may be able to secure financing for some deals via traditional channels, you may not be able to finance every great deal you happen to encounter.

If you have a track record as a real estate investor, private money still may be a strong option for you. Private money financing can make financing larger deals an easier feat to tackle.

What Capital Fundings LLC Looks For in a Borrower

We look for the following when considering a potential borrower’s loan application:

• Property You Wish To Finance is Commercial (Owner Occupied Not Accepted)

• Successful Track Record as a Real Estate Investor

• Property That Serves as Sufficient Collateral

• High Estimated Return From The Deal if Executed

• Loan to Value (LTV) of Less Than 90%

• Minimum Credit Score of 550

If you bring us a deal that meets this criteria, we are highly likely to offer the financing options you need to close what could be a successful transaction!

Private Money from Capital Fundings LLC May Be The Financing Option You Need!

To succeed in the current market environment, private money can give you an edge in making successful and lucrative real estate deals. Private money financing can be a useful tool for all sorts of real estate investment strategies: whether you you are flipper of commercial properties, or prefer to buy and turnaround for rental income, private money financing can give you a flexible financing option that allows you to both quickly make deals and achieve an IRR that makes said deal worthwhile.

Contact us today if you have a real estate deal that could benefit from the flexible financing option of a private money loan.