Sunday, Jun 16, 2019
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Securing financing for their projects is one of the biggest challenges that fix-and-flip investors face. Investors should secure first the required capital to buy the property, pay the workers, and pay the fees, and other costs before they can start renovating a property for eventual rental or sale. Almost every fix-and-flip investor relies on private money lenders to finance their projects.

They Have Higher Rates and Shorter Terms than Conventional Loans

The terms on a private loan greatly depend from one lender to another. But, these forms of loans are known to have shorter terms than conventional loans. Oftentimes, the maturity of a private loan ranges from 1 up to 3 years. Private money loans often have higher interest rates than traditional bank loans due to shorter terms. Usually, the interest rates run around 8% up to 16%. A private money lender can offer loans that range from $50,000 up to $1 million.

Faster Turnaround

One big benefit of a private money loan is much quicker access to capital when compared to traditional bank loans. Private money loans are quickly processed. There are even several money lenders that issue same day loan approvals. In addition to that, financing is also quickly distributed. Oftentimes, it will only take days after the approval. These features offer fix-and-flip investors a major advantage whenever they are competing with other investors for the same property.

Usually, private money lenders such as those fast loan money lender in Singapore mostly focus on the property’s value instead of the borrower’s wealth. This is another major benefit of a private money lender. Even if they have a bad credit score, an investor can still apply for a loan as long as they have the skill to sell the property.