Private lending is when an individual makes the decision to lend their liquid capital into a real estate investment transaction with the expectation of earning returns on their money secured by collateral. Lenders can earn high-interest rates generally 4 or 5 times the rate you can get on bank CDs and other Traditional Investment Plans.

On a property purchase requiring renovations, the cost will be allocated to the purchase price, renovations, carrying costs, cost to resell, and a small buffer for unexpected expenses. 

There are many reasons, but the primary reason is the time and speed of the transaction. Many of the homes we purchase need a quick sale within 14-30 days. A traditional bank requires 30-45 days to close a loan. The leveraging power is far greater when we purchase using cash instead of financing. Many traditional home sales fall out of the contract because of financing issues, and this allows us to negotiate a lower purchase price and reduce our risk. Lending guidelines are also continually changing and are increasingly becoming more difficult.

We make our money on the purchase, and this allows us to purchase 20%-30% below a retail consumer. This instantly creates equity in the transaction. Ideally, there is no middleman in a transaction, no commissions, mortgage broker fees, etc.

Most short-term loans are set up on an 8-12 month note. However, it depends on the size and scope of the project. We will review all the details of the project beforehand so that you know exactly what the expectations are and the timeline for all parties involved. 

Our company pays one large lump sum at closing on a short-term note. This is much easier to manage for all involved, especially if we're pulling funds from a retirement account.