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Private Money

Fast, flexible financing for real estate investors

Some deals can't wait 30–45 days for a bank to finish underwriting, and some don't fit inside conventional lending guidelines at all. Private money loans cover those cases. Funding comes from private investors instead of banks or government-backed programs, so approval centers on the property and your plan for it.

What Is a Private Money Loan?

A private money loan is a short-term loan secured by real estate and funded by private investors or investment groups. Traditional mortgages depend heavily on your income, tax returns, and debt-to-income ratio. Private lenders focus mainly on:

  • The property's value, either as-is or after repairs
  • Your equity or down payment, meaning how much skin you have in the deal
  • Your exit strategy, meaning how you plan to repay the loan (sale, refinance, etc.)
  • Your experience, especially on fix-and-flip or construction projects

That lets private money move quickly and handle deals traditional lenders often turn down.

Who It's For

  • Fix-and-flip investors buying distressed properties to renovate and resell
  • Buy-and-hold investors who need to close fast, then refinance into long-term financing
  • Self-employed borrowers and business owners whose tax returns don't reflect their real income
  • Investors competing against cash offers who need a quick, dependable close
  • Borrowers with credit or documentation challenges who have strong equity in the property

Common Uses

  • Purchasing and renovating investment properties
  • Bridge financing between selling one property and buying another
  • Acquiring properties that won't qualify for conventional financing because of condition
  • Pulling equity from an investment property to fund your next deal
  • Land and construction projects

What to Expect

Private money is a tool for specific situations, and you should know the tradeoffs before you commit:

  • Shorter terms: typically months to a few years, not 30 years
  • Higher costs: rates and fees run higher than conventional loans, reflecting the speed and flexibility
  • Larger down payment or equity requirement: lenders protect themselves with lower loan-to-value ratios
  • A clear exit plan is essential: you need a realistic way to pay the loan off before it matures

Used correctly, private money helps you capture deals you'd otherwise lose. Used without a plan, it gets expensive quickly. We'll tell you plainly whether it makes sense for your situation.