It can be extremely difficult, especially in the current lending market, to obtain financing for unconventional projects or deals, regardless of how potentially bankable they may be. This is why getting to know local hard money lenders is important to real estate investors, because these are the lenders they will turn to when they have an out-of-the-bank deal that needs financing. Here are five main reasons to keep a hard money lender in your financial arsenal:

1. Availability of capital. Private lenders often have much greater amounts of capital available to lend than their traditional counterparts and, unlike their counterparts, these funds are not restricted by government regulations and requirements. Also, when you request funds from a private lender (such as Montegra), you are dealing directly with the decision maker who controls the funds, rather than the intermediary who has to get approval from an oversight committee.
2. Affordability of funding. Although the interest rates offered by private lenders are higher than those offered by institutional lenders, there is often less of a difference in the cost of the loan once transaction fees and points are taken into consideration. Also, the additional costs in interest rates are often offset by the profits made by being able to close quickly, in weeks rather than months. Reputable hard money lenders are also usually more transparent in their dealings than their conventional counterparts.
3. Flexibility in terms. Private lenders are typically knowledgeable about both business and real estate, so they are more willing, and able, to adapt their loans and loan requirements to unusual situations in ways that banks are not allowed to.
4. Ability to give advice. Private lenders are able to share their expertise and knowledge of the local real estate market in ways that employees of institutional lenders would not dare. With their information and experience, if your hard money lender doesn’t like a deal you present, it might be worth reconsidering.
5. Security for both parties. Private loans have all the same legalities as conventional loans (e.g., escrow accounts, proper paperwork, insurance, and inspections) to ensure that both parties are protected, as well as granting the borrower some much-needed peace of mind.

At Montegra, we pride ourselves on living up to all five of these qualities when forging relationships with our borrowers. For more information about our hard money loan programs or to submit a loan request, you can contact us at (303) 377-4181.