For real estate investors planning to start the process of acquiring a new property asset to add to your portfolio, you will have to make an important initial decision when it comes to handling the financial aspect of the transaction. The majority of investors will have to borrow capital from a lending entity; however, there are a broad range of potential lenders to choose from—and the funding source that you end up settling on will significantly impact your experience over the lifetime of the subsequent loan. One of the biggest distinguishing factors among the lending options that you have available to you is whether they are classified as a traditional or private lender. Although each and every investment property acquisition differs in some aspect, the majority of seasoned real estate investors choose to work with private money lenders as opposed to a traditional bank. The experienced team of financial experts at Coastal Capital Funding have years of experience crafting innovating funding solutions that enable investors to grow and scale their businesses—here’s their take on some of the main advantages of working with a private lender.
Conventional banking institutions are required to abide by stringent federal guidelines when underwriting loans. That translates into severely reduced flexibility when it comes to offering investors financial options to close a deal. Banks are also usually larger organizations. Meaning that while you may submit your loan application at the nearest location, there may be hundreds of affiliated offices scattered throughout the country all managed by a remote corporate office that sets the overarching policies. So if you do not met their specific requirements exactly, you have no other alternative but to seek out an alternative lender. This is not how private lenders function. For starters, the applicable statutes for private lenders are far less restrictive, allowing them to work with investors to develop viable funding plans that are individually tailored to each unique investment project. Private lenders are also typically much smaller entities. Just miss the credit score requirement by a quarter of a percent? A traditional bank would show you the door. Only need a loan for six months? There’s a good chance a bank would laugh you out of the office. A private lender like Coastal Capital Funding, on the other hand, is willing to work with you in both scenarios to come up with a solution.
On top of having the ability to adjust the underwriting requirements to qualify for a loan, private lenders are also capable of adjusting course midway through the loan term to adapt to changing circumstances. Unexpected developments and setbacks can and often do happen during investment projects that can inhibit an investor’s ability to make timely payments. Banks’ standard operating procedure is to send you a few delinquency notice letters then repossess the property. Or, alternatively, if you generate more revenue than expected and attempt to pay off the loan ahead of schedule, they will hit you with a huge prepayment penalty. Private lenders can adjust repayment schedules easily and Coastal Capital Funding does not impose prepayment fees. At the end of the day, your success as an investor is a win for the Coastal team—and we are more than willing to go the extra mile to make it happen.
A Trusted Lending Partner
Coastal Capital Funding is a direct private lender that prides itself in offering accessible and efficient funding solutions for investors throughout Virginia and North Carolina as well as across the country. We implement a transparent, common-sense philosophy when it comes to underwriting, allowing us to facilitate transactions of all sorts in a fraction of the time and hassle it takes if you were to work with a traditional bank. What differentiates CCF from other lenders is Service, Service and Service. Our phones are available to our clients 7 days a week. With over three decades of collective experience in the real estate industry, the CCF team has the insight to help you take your investment business to the next level. Contact us today to learn more!