The real estate market has long been a source of dependable returns and dividends. Each year, canny entrepreneurs leverage rentals and fix and flip properties to yield high returns on investments–with fix and flip investments averaging a 27.5% ROI.
Success in the real estate investment market is reliant on four aspects:
- Data-backed decisions from adequate market and property research
- Establishing strong and virtuous relationships with other industry professionals
- The ability to build a dream team of essential players within the real estate market
- Finding the most reliable and flexible investor funding partner
The latter is a rarely discussed but integral part of achieving economic success and business growth.
Today, novice real estate investor entrepreneurs tend to gravitate toward recognizable, traditional capital sources–like consumer mortgages or refinancing. Some even utilize trendy funding options, like crowdfunding. When, in reality, leveraging business purpose loans through private lenders is the best avenue to investment success and business growth.
Let’s look at some alternative funding options and why they aren’t ideal for investors. Then, we’ll discuss the power of business purpose loans and why utilizing private lenders for your business loans is the premier way to fuel your real estate vision.
Investor Funding Growing Pains
Consumer Mortgages
These mortgages’ lack of flexibility, speed, and the requirements for stellar credit and significant down payments make them a hassle for investors.
HELOC/Refinancing
However, both options require you to own property with equity built in. And, should your project encounter obstacles that slow property hold times, you leave yourself vulnerable to foreclosure.
Crowdfunding
While you avoid loan application pains, investors absorb all the headaches associated with investment properties with large networks of backers. Crowdfunding requires constant communication, stellar negotiation skills, and compromise. Additionally, crowdfunding entails divvying up profits among several investors–significantly decreasing your profit.
The Power of Business Purpose Loans
Why Use Private Lenders for Business Loans?
Fewer regulations and requirements, as well as flexibility, make acquiring business-purpose loans through private lenders a more seamless and advantageous endeavor for investors.
Let’s dive deeper into the benefits of utilizing private lenders for business loans:
Multiple Options to Fit Your Needs
- Fix and Flip Loans
- 1 – 4 Unit Bridge Loans
- Rental & Rental Portfolio Loans
- Ground-up Construction Loans
Flexible Terms
Unlike stringent bank loans, private lenders have flexible investor funding options to meet your unique circumstances.
Fast Approval
Quick loan approval processes enable savvy entrepreneurs to outpace their competition and capitalize on properties quickly.
Control Over Sale Price
Business loans through private lenders cover the construction, repair, and purchase of a property at a lower interest rate. This empowers investors to sell properties at lower prices while still turning a substantial profit.
Types of Properties
- Non-owner occupied
- Attached or detached Short Family Rentals (SFR)
- 2 – 4 unit properties
- Townhomes
- Warrantable condos
- PUD
No Prepayment Penalties
Eligibility for Low Credit Borrowers
Utilizing private lenders for business loans gives real estate investor entrepreneurs a better chance of getting approved–regardless of credit score and downpayment. Most importantly, they gain the funding speed and flexibility necessary to outpace the competition and grow their business.
