Understanding Private Money Lending
Are you searching for ways to finance your next real estate investment? A private money lender infuses flexibility into the loan process, offering a variety of loan types, repayment terms, and qualification criteria. Let’s explore the basics of a private money lender in more detail.
What is a Private Money Lender?
You might have seen the term private money lender pop up in search results when looking for your next avenue of financing, but what does it really mean? Unlike traditional lenders, such as banks or credit unions, private money lenders are non-institutional entities that provide alternative financing solutions to borrowers. Private money lenders can offer more flexibility in terms and focus on specific niche markets. They can be individuals, private investors, or specialized lending firms that offer these alternative financing options.
Common loan types issued by private money lenders include purchase loans, refinance loans, partnership buyouts, 1031 exchanges, and value-added acquisitions. Some private money lenders will specialize in a particular property type, such as exclusively commercial or exclusively investment residential real estate, while others have the capability to lend on multiple property types. This makes it important to find the right private money lender for your unique situation.
Loans are made or arranged by Wilshire Quinn Income Fund, LLC (the “Fund”) pursuant to California Finance Lenders Law license #603J060. The information contained in this message is for informational purposes only and is meant to provide general background information on the Fund and its manager, Wilshire Quinn Capital, Inc. (the “Manager”). Any and all information herein is deemed reliable but is not guaranteed.
When Should You Use a Private Money Lender?
There are many different instances where it makes sense to use a private money lender for financing your real estate investment. When dealing with unique or unconventional property types that traditional lenders may be hesitant to finance, private money lenders can offer tailored solutions. Private money lenders aren’t constrained by strict criteria, allowing for more versatility in their financing solutions.
Private money lenders are also often chosen by borrowers for real estate transactions that require a quick close. Private money lenders have streamlined approval processes, requiring less extensive documentation, due to their focus on asset-based lending. The two biggest factors looked at during the underwriting process include the loan-to-value and location of the property. Private money lenders operate with experienced decision-makers who can assess the viability of a transaction rapidly. This contrasts with traditional institutions, where decision-making processes involve multiple layers.
Pros and Cons of Private Money Lending
Securing a loan through a private money lender adds flexibility in each step of the process, from initial qualifications to how you repay the loan. This means that you can still qualify even if you have a lower credit score, it is your first investment property, or your debt-to-income levels are too high. However, with this ability to offer flexibility and personalized terms, private lenders tend to have higher interest rates than those offered by traditional lenders. Borrowers who choose private money lenders are typically willing to accept higher interest rates in exchange for the advantages.
If you are still unsure if this type of financing is right for you, reach out to one of our experienced team members at Wilshire Quinn Capital. We can walk you through our private money lending program, and provide transparency with how this type of financing may fit your specific situation.
- Funding typically in 5-7 business days
Loan Amounts from $500,000 to $20,000,000
Interest Rates from 9% to 12%
Loan Term: 6 – 18 months
Commercial & Residential (non-owner occupied) Real Estate
- Purchase, Refinance, Cash-out Refinance, Rehab, Blanket Loans
Foreign National Loans Available
About Wilshire Quinn
Wilshire Quinn is a San Diego hard money lender focused on short term bridge loans, secured by first trust deeds. The company is based in San Diego, CA with offices in Los Angeles and San Francisco. Wilshire Quinn typically funds loans for their customers in 5-7 days. Their successful track record is closely linked to their ability to make immediate lending decisions based on their highly disciplined underwriting approach. The company funds a variety of loans such as: refinance, purchase, blanket, rehab loans, 1031 exchange, partnership buyouts, and more. They originate hard money loans ranging from $200,000 – $20,000,000. Wilshire Quinn works with commercial and residential buyers nationwide.
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