Private money loans come in all shapes and sizes. As one can see from our loan portfolio page, we have brokered some very large loans on residential and commercial properties. Yet, we’ve also funded many smaller loans, like this $70,000 private money loan for a Joshua Tree investment property.
The buyer/borrower came to us through a Palm Springs realtor we’ve worked with several times in the past. They were seeking private money financing for clients who could not obtain conventional loans for a wide variety of reasons (prior short sale(s), hard to document income, bad credit from a recent divorce, etc).
This was a case where the buyer had a significant down payment, was self-employed, and therefore couldn’t document enough income for a conventional loan. Plus, the borrower wanted to pay off the loan within three years and own the property free and clear.
We often talk to realtors, mortgage brokers, and borrowers about going the path of least resistance of private money loans even if the terms are higher than conventional loans. Private money financing will get the job done rather than face numerous loan rejections or turn downs when applying with conventional lenders that leads to missing out on a property.
Taking the path of least resistance worked well in this situation. The buyer easily obtained the loan for $70,000 at an 8.50% rate. The loan only had a 12-month guaranteed interest clause, meaning that if the loan was paid off in full in the 11th month, the borrower would owe one more month of interest payments to the lender. This is pretty common in private money loans.
Private Money Loan Terms:
- $70,000 Loan Amount
- 8.50% Interest-Only
- 36-Month Term
- 12-Month Guaranteed Interest