6,416,169
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.
-
Michael Jacobs
Pasadena, CA
-
John Pusa
Glendale, CA
-
Carol Williams
Wenatchee, WA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Olga Simoncelli
New Fairfield, CT
-
Ron and Alexandra Seigel
Carpinteria, CA
-
Nina Hollander, Broker
Charlotte, NC
-
Mel Ahrens, MBA, Kelly...
Hood River, OR
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
5,111,821
You've received some good responses. But don't forget it will probably cost a whole lot more.
-
Michael Jacobs
Pasadena, CA
-
Carol Williams
Wenatchee, WA
-
Kathleen Daniels, Prob...
San Jose, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Ron and Alexandra Seigel
Carpinteria, CA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
5,583,328
there are no fed funding rules
less paperwork
no points .... no appraisal....
close quickly....
no tax or ins prepaids....
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Ron and Alexandra Seigel
Carpinteria, CA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
-
Nina Hollander, Broker
Charlotte, NC
5,253,385
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.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Ron and Alexandra Seigel
Carpinteria, CA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
-
Nina Hollander, Broker
Charlotte, NC
420,003
Faster but more expensive
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Ron and Alexandra Seigel
Carpinteria, CA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
-
Nina Hollander, Broker
Charlotte, NC
1,552,928
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.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Bob Crane
Stevens Point, WI
-
Barbara Todaro
Franklin, MA
-
Ron and Alexandra Seigel
Carpinteria, CA
1,056,097
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!
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Bob Crane
Stevens Point, WI
-
Ron and Alexandra Seigel
Carpinteria, CA
-
Wanda Kubat-Nerdin - W...
St. George, UT
962,383
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.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
-
Nina Hollander, Broker
Charlotte, NC
509,449
They are faster and somewhat more flexible since they are not the government. However, they are more expensive.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
715,632
If you can't get traditional lenders to finance, a private investor may be the only way to finance the property.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Candice A. Donofrio
Fort Mohave, AZ
-
Bob Crane
Stevens Point, WI
2,784,416
Today their greed and doubt may slow things down plus financing goes well
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
5,772,575
You have great answers from the membership. A
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
921,504
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.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Bob Crane
Stevens Point, WI
-
Wanda Kubat-Nerdin - W...
St. George, UT
3,138,132
Have no idea, never used a private invester...BTW, are you are secret agent?
-
Michael Jacobs
Pasadena, CA
-
John Pusa
Glendale, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Bob Crane
Stevens Point, WI
-
Nina Hollander, Broker
Charlotte, NC
430,172
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
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Candice A. Donofrio
Fort Mohave, AZ
5,237,958
Faster, less restrictive and carries a higher rate!
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Candice A. Donofrio
Fort Mohave, AZ
4,900,085
When you have not so good credit, and you don't mind paying higher interest rate.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Candice A. Donofrio
Fort Mohave, AZ
469,510
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.
-
Bob "RealMan" Timm
Minot, ND
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Doug Dawes
Topsfield, MA
-
Candice A. Donofrio
Fort Mohave, AZ
4,175,629
Many good responses.
-
Michael Jacobs
Pasadena, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
-
Wanda Kubat-Nerdin - W...
St. George, UT
-
Bob Crane
Stevens Point, WI
1,201,302
Many valid reasons already shared.
-
Michael Jacobs
Pasadena, CA
-
John Pusa
Glendale, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
3,416,038
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.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
902,038
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.
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
131,157
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 "RealMan" Timm
Minot, ND
-
Michael Jacobs
Pasadena, CA
-
John Juarez
Fremont, CA
2,399,375
Bob Crane has you well covered on this one.
-
Bob Crane
Stevens Point, WI
-
Michael Jacobs
Pasadena, CA
-
John Pusa
Glendale, CA
913,348
Sometimes - usually at a higher interest rate. It can depend on the deal/risk.
-
Bob Crane
Stevens Point, WI
-
Michael Jacobs
Pasadena, CA
-
Bob "RealMan" Timm
Minot, ND
1,505,863
.
-
Michael Jacobs
Pasadena, CA
-
Bob "RealMan" Timm
Minot, ND
-
Doug Dawes
Topsfield, MA
4,959,192
Maybe faster but also higher interest most time.
-
Bob "RealMan" Timm
Minot, ND
-
Bob Crane
Stevens Point, WI
2,221,377
You have many great answers here.
-
Bob Crane
Stevens Point, WI
-
Bob "RealMan" Timm
Minot, ND
2,187,462
You've received many good responses. Just remember, there is a price to pay for convenience.
-
Michael Jacobs
Pasadena, CA
-
Bob "RealMan" Timm
Minot, ND
3,349,229
Less bull and a lot more money.
-
Michael Jacobs
Pasadena, CA
-
Bob "RealMan" Timm
Minot, ND
1,241,754
If no lender wanting to finance use a PI.
-
Michael Jacobs
Pasadena, CA
-
Bob "RealMan" Timm
Minot, ND
1,322,519
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.
-
Michael Jacobs
Pasadena, CA
-
Bob "RealMan" Timm
Minot, ND
1,728,056
Fast money, but costly
-
Michael Jacobs
Pasadena, CA
-
Bob "RealMan" Timm
Minot, ND
1,712,776
340,328
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.
5,877,179
182,965
1,598,452
817,153
I can only add, it's easier to re-fi once your the owner of the property.