Although there are lots of people out there who have the potential to become successful real estate investors, very few attempt to. Most shrug off this avenue to riches because they don't have the money to invest in a property and they feel that it would be too difficult to secure financing in the form of a bank loan or loan from some other hard money lender. Little do they know that there is an easier and better way for a real estate investor to finance his properties - through private money lenders.

What Are Private Money Lenders?

A private money lender is an individual who has extra money to lend and who wants to make a pretty decent profit off of that money. This is the most flexible way to finance properties for real estate investors. As a real estate investor, you get to borrow money from a single individual, who isn't affiliated with any institution. Instead, they're just like you and me; therefore, the process can be much less impersonal and formal. While banks and lending institutions have rules and regulations that have to be followed when lending out money, private money lenders do not have the same restrictions.

Why Are Private Money Loans a Better Way to Finance Properties?

Because private money lenders don't have to follow the same strict rules and regulations imposed by the government and board of directors in the same way banks and other traditional lending institutions do, they can choose whom they invest with. That means they may be very willing to lend you money if they see you as someone they want to invest with, regardless of a substandard credit rating or other financial missteps.

What are the Benefits of Using a Private Money Lender?

As a real estate investor, you can approach a private money lender and explain as to why it's a good idea to invest in you. This will let the lender come to his own conclusions, but there are further benefits, too. If the private money lender is interested in working with you, both of you can work out payment and financing arrangements that are of benefit to both of you. Both you and the private money lender can state what you expect from the arrangement, agree on an interest rate and payment schedule, and basically hash out any details so the both of you are happy with the end result.

In addition, a private money loan is a short-term loan. This means that the private money lender might very well be willing to wait until after the property has been "flipped" to receive any repayment. This gives you chance to fix and sell the property without worrying about whether or not you can make payments on a property that hasn't actually made you any money.

In Summary: the Benefits of Private Money Lender

Private Lender can lend freely and does not have to abide by tough rules and restrictions. Allows real estate investors with problematic personal credit histories to secure financing for their properties.

Provides for more open-minded communication between the borrower and private money lender. The borrower can negotiate a flat fee or interest-rate that is certainly a better deal for the borrower than that of a traditional loan.

Borrower can make custom payment arrangements that will be beneficial to them and the lender. Payments may even be suspended until the property is sold.

There is no formal application process required. Instead, borrowers can negotiate directly with private money lenders and convince them to work with them in the purchase of the property or properties in question.

Unlike institutional bank loans, working with a private money lender will help him see you as an individual with established goals instead of just as a paper application that has to pass specific guidelines.

All of these benefits make money lender Singapore the most flexible funding option for real estate investors. A private money lender allows you a variety of options and opens the door for many real estate investors who would otherwise be turned down by a traditional lender.