Why Private Loans Work for Commercial Real Estate Investors
You might be wondering why private loans are so well suited for commercial real estate investors. There are many reasons why this might be but perhaps the following five ideas might be a good start.
They Are Quick
When you go into a private lending office, you might be surprised to find that they do not require the typical 60 to 90 days that conventional mortgages will take to fund, and so this type of lending works really well for commercial real estate investors who depend on a quick closing to be able to bring home their paychecks.
They Are All About Networking
Few people are really as good at networking as commercial real estate investors. They network everywhere they go because their livelihoods essentially hinge upon knowing people. An investor might not always be able to tell where the next source of financing is going to come from. In addition, where their properties are concerned, a commercial real estate investor needs to have a wide network of tradespeople. Commercial real estate investing is all about networking, which lends to private lending very well, since obtaining private loans depends on having strong relationships with people and companies who can provide financing.
Investors Are Reliable
Commercial real estate investors are reliable. Private lending can be a bit trickier because they don’t require all the documentation and sensitive information that will be asked of you on bank loan applications and documents. Commercial real estate investors are generally very reliable and trustworthy and are passionate about their businesses. When someone has passion for what they do, they tend to work harder and be more responsible with it.
They Are All About Relationships
Real estate investors are all about relationships, and so are private loans. A smart investor knows that without networking and leveraging the right relationships, financing will be difficult to come by. Did you know that most private lending occurs because of relationships? Real estate investors know how to use relationships and who to network with to make financing their opportunities smoother and easier.
They Keep Things Moving
If there is one thing a real estate investor knows how to do and do well, it is keep things moving. Their business often relies on them being able to move properties quickly, since no investor really wants to sit on a property and continue paying the mortgage. They make money when they acquire a property, devise a working exit strategy, and then execute that plan. Private loans likewise are efficient and quick ways to get financing and for this reason and many others, they work very well for commercial real estate investors.