Hard money lenders are defined as private people or small groups who lend money. But does that mean that Arizona private money lenders are the same as hard money lenders?
For the most part, everyone knows hard money lenders as private lenders who provide loans based on the value of an asset being used as collateral rather than the borrower’s credit score. In most cases, it is the property that is being purchased with the loan, and the lender will only provide a specific percentage of the purchase price. This creates instant equity and security for the lender. But this also sounds like it could be just another name for Arizona private money lenders, which is not the case.
The term Arizona private money lenders is most often referring to a lender with whom you have a more personal relationship. The first group of people that you might approach if you are looking for a loan or investor is often friends and family members. This can also include neighbors, coworkers, and other people that you know and have a causal relationship within your life. But the key is that you already know them. This is a group of potential lenders with whom you feel very comfortable and can easily speak to about a loan, as opposed to a hard money lender whom you have never met before.
When your pool of family, friends, and personal acquaintances does not turn up a lender, most borrowers will extend the pool of potential lenders to friends of friends, friends of family members, and others who are in some way connected to you via another person. This is a way to broaden your search but to still be working with a known person or entity so to speak. You are not really using commercial means to find a lender as you would when working with a hard money lender.
The Next Step Is Referrals
If you are fortunate, you will have found at least a few potential Arizona private money lenders within your close friends and family. And if those do not work, then a friend of the family or of an acquaintance will offer to work with you. But if you have exhausted all of the people that you know, then you might circle back to all of them and ask for recommendations of an actual hard money lender that they have experience or knowledge of. This provides at least some sense of security in knowing who you could be borrowing from.
Close But Not The Same
While hard money lenders are also private lenders in the sense that they are not a bank or other traditional lender, they are not really the same as what you would consider a private lender or person that you know. In this case, the term private is describing a person that you already have some type of relationship with before you approach them to borrow money. The benefit of going the private route is that the fees are likely to be lower, but there is always added stress when you are borrowing money from someone that you know.
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2019 Level 4 Funding LLC. All Rights Reserved.