Private Money Lending Popular with Investors Seeking Returns

Savvy Investors Like Private Money Investments

As retired investors seek to diversify their retirement portfolios, the returns earned in private money lending are very enticing. Private money lending is called, ‘trust deed investing,’ and under this investment model, investors rely heavily on the expertise of seasoned real estate investors who identify good deals.

Investors who are doing private money lending are making loans to these seasoned real estate investors on real estate with income-producing potential or an upside on value. Because these loans are made at a lower loan to value on already discounted real estate, private money lenders find themselves in a lower risk asset as compared with other investment opportunities.


In California, more and more investors are enticed by the returns offered by private money lending. These returns range from 9% to 12% annually. Because banks aren’t readily lending on investment properties, real estate investors are depending on private money lenders to finance their deals more and more.  Although most can qualify for a bank loan, there are usually time constraints on a good real estate deal. Because private money lending is much faster than bank lending to fund on a deal, even those who can qualify at the bank are seeking out private money lenders to finance their deals.

For private money lenders that work with a seasoned and professional broker to manage all of their transactions, returns between 9% to 12% annually seem as effortless as putting your money into the stock market. However, rather than just “letting it ride” in the stock market, private money lenders are parking their cash into hard assets. And in a rising tide of values, real estate at the right price is a relatively safe place to park that cash. Call us at California Private Money Lenders or contact us through our website to see how we can help you realize your investment goals.


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Bankruptcy & Foreclosure Loan Tips

Mortgage Options with Bankruptcy or Foreclosure

Since the credit crunch of 2008 began, hard money lenders have stepped up to fill the void in the area of lending. For those who have had a bankruptcy or foreclosure on their credit in recent years, bank loans are simply not an option. These borrowers have had to obtain hard money and private money loans for badly needed credit to finance their business and investment activities. While there are some hard money lenders who will not lend to people with a bankruptcy or foreclosure on their credit, most private lenders are stepping up to provide these loans in abundance.


Collateral Not Credit Scores

Because most hard money lenders lend on the asset being used as collateral for the loan, they are more likely to provide a loan to someone with bad credit. There are exceptions to this however, as some private money lenders are now starting to pull credit prior to making a loan. In fact, some potential borrowers are shocked that a credit report is a requirement of a hard money loan. These are the people who remember the days when a hard money lender would lend 100% of the purchase price on an investment property, and in some cases would even provide the money for repairs. Unfortunately, most of the hard money lenders who made such loans are no longer in business.


Non-Banking Loan Options

Bank lending is still very tight and inflexible, and will likely remain so for many years to come. For those who have had major hits to their credit in the last several years, hard money loans are their saving grace. Without the availability of private, non-bank financing in recent years, the recovery of the real estate market may have been a much slower process. For those borrowers with bankruptcies and foreclosures on their credit, the high interest rates charged by hard money lenders is just the cost of continuing to do business.

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