Private Real estate loans are only for commercial real estate.
Hard money loans can be used for both commercial and residential real estate investments. They are often used by real estate investors who need to act quickly on a property or who are looking to renovate and flip a property.
Hard money loans are too expensive.
Private Real Estate loans often come with higher interest rates and fees compared to traditional bank loans. However, they can also be funded more quickly and with less strict lending criteria. For real estate investors who need quick access to funding, the higher costs of a hard money loan may be worth it.
Lenders don’t care about the borrower’s ability to repay the loan.
Hard money lenders do care! While they may not require a high credit score, they will typically want to see evidence that the borrower has a plan to repay the loan. This may include evidence of a stable income or a plan to quickly renovate and flip a property.