Most of people get always confused about the real function of these private money lenders, and about the kind of properties they give their own money as loan. Private money lenders are basically money that is privatized meaning they don’t have any charters. It is necessary to tell you that they are not under any kind of obligations as they are offering their own money for the investment. So it may not sound strange if they have different rules than the conventional lenders. Their main rule is to invest in partnership with the real estate investors having good property deals in hand.
The usual procedure related to conventional lenders like banks is that they take all the records of the applicant. Then they have the agreement in black and white for the legal details. So we can say that all loan applicants have to sign IOUs while dealing with these banks. They use the agreement papers for their own capital and a whole process goes around. While the scenario with these Private Money Lenders is quite different, as they are looking for your cooperation and your consultation for the sake of your profits and for the earning of interest over their own loan money. The interests are the only source of their income. Banks can go on recapitalizing with the every loan application but these lenders have only a limited aim to get you into good property business and get their own benefit out of it.
You have to face many difficult situations with traditional lenders as they require your previous bank statements, credit scores and tax returns. Then these lenders have to get the Down Payment and Regular Monthly Installments. They have a very difficult loan processing system taking almost a month. On the contrary if you are dealing for loan application with Private Money Lenders then you are supposed to show not a single document, but you have to be free from any legalities for at least a year. Then you are also not demanded to pay the installment kind of things. These private money lenders take only 7-10 days for loan approval but only after evaluators have given their verdict in positive.
The evaluation thing is really very important as these private money lenders are solely relying on a good property deal for the return of their money. It gives them a right to have a proper understanding of the kind of property you are looking for. Suppose you have made a real bad deal that is not going to benefit you and ultimately your lender. So you must take extra caution while making a property choice and then placing a careful price tag over it.
These lenders are not going to disturb you without a reason if you are having everything according to the rules of the game, and they would let you enjoy the flavor of being the owners of your purchased properties. The reselling transaction would involve them as you have to pay back the loan money, along with the interest over it. Having all these benefits would definitely never bother you to pay some extra dollars on evaluation and on a slightly higher interest rate.