Lending to real estate investors offers the Private Lender many benefits not otherwise enjoyed through other means. Before we get into the benefits, let us briefly explore what Private Money Lending is. In the real estate financing industry, private money lending refers to the money an individual, not a bank, lends to a real estate investor in exchange for a pre-determined rate of return or other consideration. Why private loans? Banks do not typically lend to investors on properties that require improvement to attain market value, or 'after repair value' (ARV). Savvy people with available cash in a broker account or self-directed IRA, realize that they can fill the void left by the banks and attain a greater return than they may be currently getting in CD's, bonds, savings and money market accounts, or even the stock market. So a market was born, and it has become essential to real estate investors.
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