Real estate investing has been a long time avenue for building wealth. Compared to other investing methods, real estate tends to be less volatile and properties tend to maintain their appreciation values. These facts coupled with abundant opportunities in rehabilitating or “flipping” homes can yield great ROI (return on investment) for investors. The problem, however, is that securing the funds you need can be cumbersome when your capital is tied up in property. Following are the top three ways private money or “bridge loans” may be of use to real estate investors.
You Don’t Have Time for Traditional Lending
Perhaps there’s a property on the market with great potential but you don’t have time to wait for traditional lenders to make a decision or release funds. Waiting on a traditional lender may cause you to lose the potential investment all together because another investor with cash was able to snatch up the property. Private money loans and alternative lenders tend to make their decisions much more quickly than traditional lenders.
Funds are Tied Up in Another Property
If you are low on cash to purchase an investment property because your recent real estate project is just coming to a close, a “bridge” loan (private money) may be useful to give you the capital you need to move forward with your next investment.
The Closing Process is Taking Too Long
Another common scenario investors run into is the 30- to 60-day wait for a sale to close. Even if the property was sold for a profit, waiting on funds to be released from a mortgage company can put a damper on timing your next project. This is another scenario where private money can help you move along with your business goals.
At RJ Funding Services (also known as Rafter J Funding Services), we offer private lending to real estate investors. Our bridge loans are provided on a short-term repayment basis—normally less than 15 months. We also offer other sources of alternative funding including asset-based loans and secured real estate loans.
Call us today at (855)461-1685 to speak with a knowledgeable and friendly member of our team.