Most of my early deals were with private investors.

• Quicker
• Less paperwork
• More flexibility
• Less fees
• The only downfall is that they do not always have their capital free to invest.

You've received some good responses. But don't forget it will probably cost a whole lot more.

there are no fed funding rules

less paperwork

no points .... no appraisal....

close quickly....

no tax or ins prepaids....

Much faster & easier - oftentimes no appraisal is used but, interest rates are sky high. It's high-risk for the investor and you pay dearly for that.

Faster but more expensive

I got here late, Bob Crane and Barbara Todaro gave you what I would have listed; I like Bob did my early deals that way, including hard money and seller financing too.

Unlikely to be a formal appraisal, investors usually get BPO/BOV. No loan costs. However the investor is probably going to make you pay points or a large down. The rest of your terms will probably suck too. They're in it to make a yield. And they don't want the property back but they will take it if they have to. Fast!

More flexible with the particular financial situation of the investor; not bound by financial institution regulations and bureaucracy. Will generally be more expensive, whether fees or rate, if not both.

They are faster and somewhat more flexible since they are not the government.  However, they are more expensive. 

If you can't get traditional lenders to finance, a private investor may be the only way to finance the property.

Today their greed and doubt may slow things down plus financing goes well

You have great answers from the membership.  A

The advantage with private investors is you can stand as close to the abyss as you want.

Bank lenders often are required to install a safety fence for your protection.

Without some safety measures in place you need to make sure you are smarter than the other guy. You are as likey to screw him as he is to betray you.

Have no idea, never used a private invester...BTW, are you are secret agent?

They are more flexible on their terms, so they can take bigger risks with lower credit score buyers. They can closer faster and with less red tape than a traditional lender. On the flip side the buyer may have to accept less favorable terms, higher interest rates, and balloon payments, just to name a few 

Faster, less restrictive and carries a higher rate!

When you have not so good credit, and you don't mind paying higher interest rate.

In addition to what others have said another advantage is that it probably doesn't show up on your credit report and doesn't impact one's ability to get additional loans. Typically one is limited to approx 10 residential mortgages but private money doesn't have such limits so if you have the cash for down payments and  you can find enough good deals worth the cost of the hard money - you can buy as many as you can without a bank saying we won't give you any more loans.

Many good responses.

Many valid reasons already shared.

The advantage could be quick decision, quick closing, credit not looked at, condition of property doesnt matter BUT this is for short term, Buy, fix and sell. It is not for living  in, not for long term investments and will cost more. 

Just be careful what you or your clients sign and read everything very carefully. Beware of escalating late fees. Make sure there is a safe payment mechanism.

I remember.. when I bought my first duplex in my early 20's... had a private investor offer to mortgage it 100%, no appraisal, no application, nothing.. just looked at me after we had lunch.. and we drove by the house in his Jag.. and said.. do you think it is a good deal?... OK.. all good :) ... after about 5 years I went to the bank and mortgaged the balance it to pay him out and all ended well... his rate was about 1% higher than the bank.  Goes to show.. with private investors... they are like the wild west at times... you get some good ones, some not so good.. just know who you are dealing with in my opinion.  Banks are more cookie cutter but at least you know generally what you got,

Bob Crane has you well covered on this one.

Sometimes - usually at a higher interest rate. It can depend on the deal/risk.

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Maybe faster but also higher interest most time.

You have many great answers here.

You've received many good responses. Just remember, there is a price to pay for convenience. 

Less bull and a lot more money. 

If no lender wanting to finance use a PI.

Private investors make their decisions on a risk/reward basis using different criteria than conventional lenders. They are willing to take more risk and expect to be compensated accordingly. They may be willing to do some transactions that a traditional lender will not touch.

Fast money, but costly

None.

It really depends on the investor but in general I would say a whole lot less paperwork/regulatory issues. I hear about private investors offering mortgages from time to time. Generally, they are a little higher rate for a much easier experience.  It also depends on the experience of the private investor too with professional investors will likely be more formal. I also hear of some amateur investors in this space as well - i.e. borrower has a wealthy friend that is otherwise invested in fixed income or has uninvested cash that is willing to write a mortgage for a reliable friend and it can benefit both- a slightly better rate for the borrower and slightly better return for the investor friend. There are obviously pro's and cons to borrowing from a friend and it will depend on the relationship- but that is surely one possibility. 

There are some good answers here.

Quick closing but higher closing cost. 

You can close fast.

I can only add, it's easier to re-fi once your the owner of the property.