When shopping for a private real estate loan a borrower should be as selective in choosing a lender as they are in choosing their accountant, lawyer or any other professional.
Many borrowers become so focused on getting loan approval and funded, they don’t pay attention to the obligations and requirements of the loan agreement or perhaps equally important the reputation and integrity of lender.
A private hard money lending transaction has two clients; the “Borrower Client” seeking a loan and an “Investor Client” seeking to receive monthly income from making a loan. Private investors/companies making loans use investor money, their own funds or a combination of both. Regardless of the source of the funds the borrower should not only pay careful attention to the loan terms but be mindful that you are about to engage in a temporary but unique partnership. In terms of trust, communication, and attention to your concerns you want to feel comfortable on all accounts.
A good lender/partner will wholeheartedly want you the borrower to achieve a successful outcome. What does that mean? It means that you are able to achieve your intended goal and the lender receives the interest income and return of principal bargained for when making the loan.
We do view making a loan as partnering with a borrower. We want to structure a loan with your success in mind and steer clear of problems. As example, typically our loans do not cost more for a longer loan term. Allowing enough time for a loan to payoff is one way to avoid a problem! Another “partnering example” is a providing expertise. We are a lending partner that collectively has decades of valuable real estate experience. In addition to providing funding our real estate expertise often adds additional value to the borrower’s effort and can help avoid unforeseen problems. We view our loan process as collaboration – working with the borrower from the very beginning to put together a loan that makes sense and have a positive outcome.
It is important for anyone seeking a private real estate loan to take the time to seek references, ask questions and create a dialogue with the lender to obtain specific loan information and to assess (“gut check”) if you feel comfortable working with that lender.