Learn the difference between private money and hard money so you can make an informed borrowing decision.
In prior blog posts I’ve discussed the real estate jargon that all investors should be familiar with so you can talk the talk and walk the walk. There are two more terms that though they may seem interchangeable, they aren’t exactly the same.
Private money and hard money are two different ways to borrow money and I’m going to outline the differences below.
Hard money loans are funded just as quickly as the decision is made! You can begin your fix and flip venture in some cases in as short as a week. Don’t miss a good deal when it’s in front of you!
Private money loans can come from anyone who has the money to lend. It can be a family member, a friend, or a company. It is a relationship-based lending scenario that can take time to develop because they aren’t a tried and true lender, they just have the means to do so if they so choose.
They may also ask for some stake in the real estate venture because they are taking on a personal risk. Private money loans can also take longer to fund, causing you to lose out on deals.
That’s why we recommend using an Arizona hard money lenderfor your real estate business, whether you’re fixing and flipping or need a short-term loan for your buy and hold property. Contact Level 4 Funding today to discuss your next venture!
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About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.