Using private money lending to win real estate bidding wars.
In today’s real estate market, especially in California, there is a great deal of competition between buyers. Properties are consistently being sold above listing prices for all cash. If you want to show the seller that you have a serious offer, then we advise that you come prepared with an all-cash offer. Obtaining a hard money loan from a private money lending institution can help in this scenario.
Unlike traditional lenders, private money lending institutions focus more upon on the equity in a property relative to the borrower’s credit score. The underwriting and funding process can take place in a matter of days instead of weeks or months. Private money lenders typically offer short term or ‘bridge’ loans (higher interest rate, shorter term, typically interest-only products) that allow the borrower to tie up the property quickly, and provide them time to apply for longer term financing.
One suggestion to borrowers and brokers that are attempting to purchase a property that is being heavily sought after: ask your private money lender for a pre-approval letter. Sometimes by showing the seller that you have been pre-approved by a private money lending institution can help you win an offer over another party that does not have a pre-approval letter.
Lastly, when determining which private money lending institution to work with, make sure to ask if the lender is a broker or a direct lender. If you are working with a broker, then you run the risk of the broker not being able to find investors for your deal in time for closing. Working with a direct lender may help you avoid that risk.
The Wilshire Quinn Income Fund, LLC is a direct private money lender that typically funds loans in 5 to 7 business days after receiving a signed term sheet. Please click on the following to links to explore our lending parameters or submit a loan request.