Private Money Loans
Upstream is a top rated private money broker with over $200 million in loans done by our team of associates. Regardless of what you need the money for, we can help you.
Are you looking for reliable source of funding for your next real estate purchase? Do you want to work with an experienced private money lender? When it comes to closing your real estate deals, it is crucial to have a reputable private money lender on your side. Most real estate professionals don’t have the cash on hand to acquire an investment property. At least in the beginning, you need private money lenders to help you finance investment properties.
It happens often in the financial world. Well-prepared entrepreneurs and investors walk into the banks or other traditional lending institutions to apply for a loan. These entrepreneurs have great business plans, but they walk out of the bank empty-handed. If the banks say “No” to you, private money Lenders are here to help.
Getting hard money is an alternative source of funding for real estate investors. When the banks turn you down for a loan, you can rely on private lenders for the money you need.
At Upstream, we provide assistance to real estate investors who are in need of funding for their projects. We understand the challenges you face, and the opportunities you have extremely well. Many of our team members are real estate investors themselves, and know how to evaluate and assess a property. Bottom line, we can help you when other traditional lenders say no. In addition to having an experienced team, we also use artificial intelligence to help us evaluate deals faster.
Advantages of Private Money Lenders
If you’re a real estate investor then you know this: getting cash FAST is a challenge. When you see a potential opportunity, the biggest issue most real estate investors have is being able to buy the property immediately. The traditional lending process is cumbersome, and has no guarantee of success – in addition to being hard to get. If you have less than perfect credit, you’ll probably get rejected after wasting several months. Private money lenders, like Delancey Street, are an alternative. We provide you with “private money,” and have our own guidelines. We look for real estate investors who have a fantastic opportunity, and a business plan that will work. We look at the opportunity first, and the investor’s credit score last.
For a private money lender, credit score isn’t a barrier. In fact, it’s probably one of the least important things. Loans from traditional sources are contingent on a good credit history, and require a good credit score. In contrast, private lenders don’t care. Most of the time approval for a hard money loan can happen in a few days. Private money lenders focus on the overall potential profitability of the deal, rather than your financial history. Having access to quick cash gives you greater leverage as an investor, which allows you to close deals and work fast.
We’re a top rated private money lender with 10’s of millions available for funding. Regardless of what you need the money for, our team can help. We’re a reliable private money lender that can fund your business, and in addition provide advise and guidance to ensure your project succeeds. For larger projects we have a conglomerate of investors who can meet your needs. With our private money on your side, you can not only get the funding you need – but also the years of experience and expertise of numerous advisors. We provide the funding necessary so you can invest, and buy real estate, to eventually sell the property at a profit.
We approve loans faster than other private money lenders, and it’s something we can do since we use artificial intelligence. Without a doubt, this is one of our main competitive advantages, and one of the benefits of a private money loan. In many cases, we provide pre-approval for our borrowers once they establish a long term relationship with us. Unlike regular banks who can take a month or more, we provide private money loans in less than a week. When you inquire about a private money loan, make sure to specify your timeline. Unlike other private money lenders, we don’t care about your credit history or previous transactional history. Bottom line, we care about the collateral and the chances of your project succeeding. We’ll make sure you get approved even if you have bad credit, or a low credit score. We don’t require tons of paperwork or documents – we have a streamlined intake process which is fast.
What you can use our private money loans for:
Refinance existing property
One of the most common uses of private money loans is refinancing an existing property. We offer private money loans to refinance existing properties up to 50-80% of the value of the property. We offer flexible terms, ranging from 6-24 hours, with no prepayment penalty. You can use the money as you wish with no strings attached. Regardless of whether it’s a residential or commercial property, we can help you refinance it and take cash out to invest elsewhere.
Buying new property
Private money loans can be used to purchase new houses, condos, multifamily buildings, or even commercial buildings. Private money loans can be used for virtually any type of real estate transaction. You can use use it to purchase and renovate an investment property, or buy a new commercial building to flip. Private money loans can be used to buy new property for both short term fix and flip transactions, and long term buy and hold investments. Bottom line – they can be used for residential and/or commercial buildings.
Private Money Lender Loan Amounts and Down Payments
We offer loans equal to a % of the property’s loan to value ratio, or it’s after rehab value. For example, private money lenders offer loans that are 90% of a property’s loan to value. They also offer private money loans up to 80% of the property’s after repair value.
The property’s LTV is a number based a percent of it’s purchase price. The property ARV ratio is a loan which is based on the expected market value of the property after the renovations are completed. It’s common for private money lenders to give loans the LTV for property’s in good conditions. Loans based on ARV are typically given for property’s in poor condition.
When you are purchasing a new property, it’s loan is based on the LTV. When you are planning on fixing and flipping a property, the rehab loan is based on the ARV. When it comes to private money loan down payments, private lender insist that the borrower have skin in the game. This makes sure that the borrower is motivated and will finish the project. It also means that the private money lender isn’t taking the ENTIRE risk.
Upstream Private Money Interest Rates, Costs, and Fees
We don’t take a cookie cutter approach to our loans. Everything is customized from scratch, and every loan is unique. Each loan is assessed based on it’s strengths and weaknesses. The interest on a private money loan can be either repaid in monthly payments, or as a lump sum at the end of the term. We don’t charge prepayment penalties if the loan is paid off before the due date. Below are general guidelines on private money loans we offer:
– Interest rates ranging from 7% to 13%
– Lender fees(in some cases): 1.5% to 10%
– Closing costs: 2% – 5%
– Appraisal: $300 – $400 (depending on the circumstances)
Monthly payments are not amortized like a conventional mortgage. Interest rates on a private money loan are typically higher than a conventional mortgage. Due to the fact we allow you to make a bulk, lump sump payment, at the end of the term – you don’t need to worry about monthly payments. This makes a private money loan great for fix and flippers who want to reduce their monthly spend. It also makes private money loans great for buy and hold investors who don’t want huge monthly payments, and plan on refinancing later.
Private money lenders typically charge lender fees, also known as points, between 1.5% to 10%. These points can vary loan to loan. Some loans have no points, while others do. Typically points are charged for lower duration loans, and for loans that are riskier. Smaller loans sometimes get charged points, due to the fact they aren’t “big enough,” for the lender to make money long term.
What private money lenders want
Private money loan brokers like Upstream don’t want headaches. We don’t want to foreclose. We don’t want to own your property. We don’t want difficulties in getting repaid. Most private money lenders have no interest in being a real estate investor. They want to be a private money lender who earns a return on investment for the risk involved in funding your property.
That’s the “big picture,” of what a private money lender wants. If you approach a private money lender, here is what you should have in place and what a private money lender will ask for before funding your property:
– The contract: Most private money lenders want to see the contract you’ve got to purchase the property.
– Photos: If you’re buying a fixer-upper, or a new property, have pictures of the building.
– Summary: Draft an executive summary of your project for the lender. Include photos, the purchase price, renovation costs, after repair value, and HOW you’ll repay the loan and what you’ll do to repay it.
– Some lenders will want to know what people you’ve got working for you, like attorneys, etc.
Put yourself in the position of a lender and ask yourself – what would I expect if someone wanted to borrow over $100,000 from me.
What Are The Advantages Of Private Money Loans?
When you find a good real estate deal, and want to do a fix and flip, you need financing. Purchasing the property can be tricky if you don’t qualify for conventional loans. Relying on traditional funding isn’t usually the best option. The best things to do is get financing from a private money lender. Private money loans have many advantages over bank loans. Here’s a few.
Traditional loans take weeks. When a good deal is on the table, you need financing fast. Private money lenders who specialize in residential lending can get you funding quickly. Most private money lenders understand the business of buying and flipping properties. They understand rehabbing them is a fast process, and then they are sold. Most private money lenders can get you money within days, or hours.
If you’ve turned to a bank for a loan – you know the ridiculous amount of paperwork. It’s tedious and boring. When you money for a great deal – time isn’t on your side. Private money lenders know this and streamline the process. They don’t waste your time with lots of paperwork. They give you your money quickly.
Banks are super cumbersome to work with. Their guidelines are very rigid, and essentially – not a one size fits all. When it comes to private money lenders, they are more flexible when it comes to loan terms and overall loan amount. They tailor the loan to your needs. Each fix and flip deal is different, and private money loans reflect this basic concept.
Traditional banks require a lot of documentation before issuing a loan. It takes time, and it’s a hassle. You need a lender who is concerned about the deal rather than every aspect of your financial life. Private money lenders focus on asset-based financing, and as a result, they focus on your collateral.
No Hidden Fees
When you borrow money from a bank and signs reams of paperwork, you don’t know what hidden fees you are signing for. In contrast, when you work with a private money lender, there aren’t hidden fees. All of the costs and repayment requirements are transparent and laid out.
Traditional banks are global enterprises, and as a result, they lend billions of dollars. They don’t care about you as a client. They take pride in making money, and are not going to work with you in case you need help. In contrast, private money lenders are usually local, and will work with you in case something happens unexpectedly on your project.
What’s the hard money loan process?
We provide hard money
loans to real estate investors all across the USA. Our process is very standard, and one that almost any real estate investor will understand and appreciate. Typically, we prefer working with real estate investors who have a track record of investing and exiting properties. We always come first time real estate investors to contact us – we’re happy to help! Hard money loans are short term loans that are secured by real estate. We provide these loans for a term ranging from 12 months to 36 months. Typically, the loan requires no monthly payment except for a balloon payment at the end of the term. The amount we can lend is based on the value of the property. The property can be either one the borrower already owns, or one the borrower is looking to acquire. Because we’re lending based on the property’s value, rather than the borrower’s credit, we’re able to get “creative,” when it comes to approving potential borrowers and deals.
Typically, before you apply – you should have the items below in order:
- Identify a target property to acquire
- Understand how much funding you need(including fees etc)
- Identify what your exit strategy is, and how you’ll repay the loan
It’s important to realize that the only way to get approved in a timely manner is to make sure you streamline your end of the transaction. That means doing your due diligence, and assembling a file with all the necessary documents needed for underwriting to evaluate your deal.
Once you fill out our application online, a member of our underwriting team evaluates the application and will follow up with potential questions we may have. After the application is approved, our team conducts its own appraisal of the property, and waits for you to sign our term sheet. If all looks well, then we’ll proceed and get you funded.