Why Use Private Lenders Instead of Banks

The difference between banks and private lenders are these. For regulation as it relates to banks, regulation is very high and as it relates to private lenders it’s low. I don’t have a crystal ball and I’m probably going to regret saying this, but I don’t anticipate or foresee much regulation in the private money mortgage market anytime soon other than the licensing requirements which we’re already seeing.

The reason for this is the Federal Government knows that with the mandates against banks through FDIC and all the other hoops they have to jump through, about 50 percent of the properties in the country will never qualify for conventional financing. There has always been and I believe there always will be a place for private money.

The private money world is an untapped haven for entrepreneurs. When you aren’t dealing with banks—their bureaucracy, timetables and rules— options open up for the borrower (real estate investor), lender and broker in the world of real estate. There are no limits to the number of loans a lender gives to a single borrower. There is a subjective interpretation of the loan package, where a borrower is weighed on the deal rather than credit or money brought to the table.

Private money can be a more secure investment than the stock market, and truly diversifies an investor’s portfolio (versus stocks, bonds and CDs—all affected by the same market trends). Private money gives investors the funding they need to fix and flip as many properties as desired, and the steady income coming in while you lounge on the couch (or office or poolside). Visit: www.anscapitalfunding.com