Private Money Loans
Private Money Loans: Capital From People, Not Committees
When a deal does not fit a rate sheet, private capital can still fund it. Terms are negotiated around the asset and the payoff, not a credit box.
Private money is real estate financing funded by individuals, family offices, or small investor partnerships rather than an institution. The note is secured by the property, the loan to value is conservative, and the underwriting question is simple: if the borrower stops paying, does the collateral cover the balance. Because the money is discretionary, almost every term is negotiable. Draw schedules, interest reserves, amortization, cross collateralization against another property you own, and even the payoff date can be shaped around the specific project. That is the appeal for deals institutional lenders decline for reasons unrelated to risk, such as an unusual property type, a partial condominium conversion, or a self employed borrower whose tax returns understate income. The tradeoff is cost and speed of relationship. Rates run above bank pricing, points are common, and the lender expects a documented exit before wiring funds.
Who it's for
- Investors holding a contract with a short settlement window that conventional underwriting cannot meet
- Buyers of mixed use, rural, or otherwise unusual collateral that agency guidelines will not touch
- Owners who need to pull cash out of one property to close on another before a sale settles
- Borrowers with a strong asset and a messy paper trail, such as recent self employment or a past short sale
- Partnerships and LLCs financing in an entity name rather than personally
Why choose this loan type
- Terms are written per deal, so the structure can follow the project instead of the other way around
- Closings are measured in days once title and valuation are clear
- Entity vesting and non owner occupied purposes are standard rather than an exception
- A clean payoff history with a private lender often earns better pricing on the next project
Frequently asked
How is private money different from hard money?+
The line is who funds it. Hard money usually comes from a fund with a published rate sheet and a fixed box. Private money comes from individuals or small partnerships, so the terms are negotiated per deal. That flexibility cuts both ways: you can get a structure no fund would write, but pricing depends on the relationship and the strength of the collateral.
Is my personal credit reviewed at all?+
It gets a look, mostly for bankruptcies, foreclosures, and open judgments that could cloud title. It is rarely the deciding factor. The lender is underwriting the property, the exit, and your track record on similar projects far more heavily than a score.
What does a typical exit look like?+
Either a sale or a refinance into longer term financing such as a DSCR loan once the property is stabilized and leased. Private lenders want the exit spelled out before funding, so we document the intended payoff at application rather than leaving it as an assumption.
Bring us the deal
Send the address, purchase price, rehab budget if there is one, and your intended exit. We'll tell you quickly whether private capital is the right fit or whether a cheaper option covers it.
Related loan programs
- Hard money as the structured alternative
When your deal fits a standard box, fund based hard money is usually the cheaper path.
- Bridge financing for a timing gap
If the need is sequencing two closings rather than an unusual asset, a bridge loan fits better.
Contact
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