Hard Money Lenders Vs Private Money Lenders
Oct 05, 2016
Folks who work in the real estate industry frequently use the terms private money lender and hard money lenderinterchangeably. It’s true that there is some overlap between the two types of lending. Riverdale Funding is a privately-funded hard money lender, and there are important distinctions that set them apart from individual private money lenders.
Similarities Between Lenders
Both types of lenders share the following features:
- Streamlined lending processes relative to traditional bank, insurance or conduit lenders, frequently requiring less paperwork and much faster approval and funding times.
- A qualification process that is tied to the strength of the underlying real estate asset while putting less focus on the relative strength of the borrowing entity.
- The ability to lend on “non-traditional” assets. Both types of lenders are frequently viewed as go-to sources for value-add or speculative properties that offer higher returns than more traditional stabilized investment assets.
- Slightly higher interest rates and fees than traditional lenders. In exchange for these higher costs, private and hard money loans are usually much more flexible.
The Key Difference
While hard money and private loans have a lot in common, there is a fundamental difference between them. A private lender can be just about anyone. They can be a family member, a business acquaintance or a stranger. They’re people with money using it to make loans to those in need of cash.
Hard money lenders like Riverdale Funding, on the other hand, are a group of experienced lenders with a history of helping asset-owners acquire loans to purchase or refinance a multi-unit apartment building, a mixed-use development, or any kind of commercial project. Riverdale Funding maintains an office staffed with professionals.
Hard Money Lenders Offer Experience
Due to a larger number of loans and their experience, they often know of issues with certain areas, certain agents, escrow, title companies, as well as building departments, and appraisers. This means that you can do business with us in confidence.
The best hard money lenders are established businesses. For example, we have over 35 years of combined experience. Furthermore, we can lend in 35 states and Washington D.C., so if you need to get a loan in a new market, we can help you fund your entry. We can fund loans on 1 -4 Fam props that are in a Corp/LLC, Investment… multi-family, Office buildings, or retail investment properties.
When you work with a hard money lender, you’re frequently also getting the benefit of a private lender. Private lenders are motivated to do loans, rather than motivated to reject applications. They’re frequently real estate investors that understand what you’re doing. A privately-funded hard money lender can give you all of those benefits with the added size, scope and professionalism of a real lender.
Riverdale Funding commercial hard money lenders make a loan solely on the value of property, and accept all credit scores and financial histories. If you think your property qualifies for a hard money loan, contact us today for an evaluation!