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5,134,350
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

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.
Aug 22, 2019 02:01 PM
Rainmaker
3,821,471
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

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

Aug 22, 2019 02:53 PM
Rainmaker
5,567,655
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

there are no fed funding rules

less paperwork

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

close quickly....

no tax or ins prepaids....

 

Aug 22, 2019 02:26 PM
Ambassador
4,021,097
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

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.

Aug 22, 2019 02:21 PM
Rainer
298,411
Caroline Gerardo
Sun West Mortgage Corporation - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

Faster but more expensive

Aug 22, 2019 02:10 PM
Rainmaker
1,151,867
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

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.

Aug 22, 2019 03:50 PM
Rainmaker
857,017
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

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!

Aug 22, 2019 03:18 PM
Rainmaker
871,428
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

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.

Aug 22, 2019 02:22 PM
Rainmaker
474,512
Susie Kay
Ultra Real Estate Dallas Fort Worth - Plano, TX
North Dallas Specialist

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

Aug 22, 2019 05:15 PM
Rainmaker
512,375
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

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

Aug 22, 2019 04:58 PM
Rainmaker
2,600,756
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

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

Aug 22, 2019 04:54 PM
Rainmaker
5,275,157
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

You have great answers from the membership.  A

Aug 22, 2019 04:02 PM
Rainmaker
860,730
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

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.

Aug 22, 2019 03:07 PM
Ambassador
2,491,170
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

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

Aug 22, 2019 02:09 PM
Rainer
299,355
J.R. Schloemer, CRS
Kentucky Select Properties - Louisville, KY

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 

Aug 23, 2019 05:01 AM
Rainmaker
3,941,967
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Faster, less restrictive and carries a higher rate!

Aug 23, 2019 04:15 AM
Rainmaker
3,803,160
Richard Weeks
Dallas, TX
REALTOR®, Broker

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

Aug 23, 2019 03:06 AM
Rainmaker
468,099
Dan Pittsenbarger
Keller Williams Western Realty - Bellingham, WA
Improving Conditions

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.

Aug 22, 2019 09:23 PM
Rainmaker
3,275,799
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Many good responses.

Aug 22, 2019 03:37 PM
Rainmaker
956,843
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Many valid reasons already shared.

Aug 23, 2019 05:59 AM
Rainmaker
3,289,546
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

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. 

Aug 23, 2019 05:16 AM
Rainmaker
800,967
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

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.

Aug 22, 2019 06:35 PM
Rainer
79,432
Steve Penner
Royal LePage / Moneyledgers Software - Winnipeg, MB
REALTOR / Owner of Moneyledgers

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,

Aug 23, 2019 07:00 AM
Rainmaker
1,814,817
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

Bob Crane has you well covered on this one.

Aug 23, 2019 06:04 AM
Rainmaker
822,908
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

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

Aug 23, 2019 06:03 AM
Rainmaker
1,352,108
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

.

Aug 22, 2019 08:02 PM
Rainmaker
3,752,728
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Maybe faster but also higher interest most time.

 

Aug 24, 2019 09:04 AM
Rainmaker
1,666,718
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

You have many great answers here.

Aug 24, 2019 06:01 AM
Rainmaker
1,643,173
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

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

Aug 23, 2019 11:52 AM
Ambassador
2,983,799
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Less bull and a lot more money. 

Aug 23, 2019 11:42 AM
Rainmaker
1,129,164
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

If no lender wanting to finance use a PI.

Aug 23, 2019 07:57 AM
Rainmaker
855,787
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

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.

Aug 23, 2019 07:24 AM
Rainmaker
1,618,612
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Lend Smart Mortgage, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

Fast money, but costly

Aug 23, 2019 06:37 AM
Rainmaker
1,707,191
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

None.

Aug 24, 2019 07:36 AM
Rainer
195,585
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse specialist

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. 

Mar 04, 2021 05:10 AM
Rainmaker
4,654,373
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

There are some good answers here.

Sep 13, 2019 04:46 AM
Rainer
179,315
Harjeet Bhatti
FITH THIRD BANK - Chicago, IL
Home Mortgage Consultant 25 States

Quick closing but higher closing cost. 

Aug 26, 2019 01:47 PM
Rainmaker
1,595,715
Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

You can close fast.

Aug 25, 2019 04:22 PM
Rainmaker
711,701
Paul Antonelli
Antonelli Realty - Saint Cloud, FL
Broker Owner; Antonelli Realty

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

Aug 25, 2019 06:34 AM