If you are looking to buy a real estate investment property in Colorado you may be looking to close on a deal quickly, and you don’t need a 30-year loan for an easy 3-6-month flip & flip. By choosing to work with a private money lender you are given a bit more flexibility to work with. But, just like any other loan process, it is still possible to make mistakes.
Here are a few tips on borrowing from a Private Money Lender in Colorado:
Be prepared for a down payment
The details of every private money loan will depend on the investor buy typically the lending terms will fall within these terms; 1-3 year notes, up to 75% LTC, 0%-3% origination fees and interest only (monthly) payments.
Keep things realistic
Having large goals are great to shoot for, but having realistic goals is even better. We want to see you achieve goals and not just claim you can do everything and more. When discussing with your lender be specific about what your goals are. Have the figures and information prepared to be reviewed thoroughly.
Keep your word
This may go in line with the keeping things realistic, but if you state that you’ll have a portion of your work completed before you request a draw you will be expected to have that amount completed. If you fail to perform you could hurt your integrity, and the relationship with the lender could also be hurt as well.
Find an experienced local lender
We know most investors like to support their local community buy shopping locally or donating to local charities. You can do the same with your private money lender in Colorado and you’ll also get the experience of someone who is invested in seeing the community you are working in thrive.
Patience is Key
Yes, private money lenders are going to move faster than a traditional lender, but by being overly pushy and checking in too frequently or too aggressively you may be distracting the lender from getting the loan completed. Typically, the lender should be the one following up with you letting you know where your loan is at in the process. So, take a breath, and trust that we know how time sensitive the deal is.
One last tip to keep in mind: private money lending in Colorado has different rules. No matter where the lending is coming from there are regulations and rules associated with it, and if you’re working with a private money lender in Colorado, they may also have other rules to follow so make sure you know them.
For more information on private money lending in Colorado or if you are interested in buying an investment property in Colorado, contact Indicate Capital.