Whether you are new to the real estate investment arena or a seasoned veteran, one of the most important aspects of your success will be your ability to access reliable and fast funding. Money makes the world go round, right?
You can line up a stellar team, have a solid timeline, and all the dedication in the world, but without investing the time and energy into building a relationship with an lender that will provide you with a steady stream of funding, your projects just wont succeed. So how do you navigate through all the options and find a funder that will work best for you? And how do you ensure a long-term connection to this lender so you can scale up your business and move to the next level?
Well, at CPL investments, we pride ourselves on being a unique and hybrid option for clients looking for a local team, with local money, and local, in-house decision-making. However, before we can talk about what makes us special, let’s do a quick run down of the differences between “Hard Money Lenders” and “Private Lenders”.
Let’s start with Private Lenders. Typically, a private lender is a single entity or a group of folks collectively creating a fund to invest their personal capital in the hopes of gaining a return on their investment. Typically, Private lenders make quicker decisions, can be simpler to work with compared to large banks, and have that personal touch.
The exciting thing about working with a Private Lender is that it truly creates a ‘win-win’ situation for everyone involved: you are able to access funding to complete projects you might not otherwise have had access to, and the lender is able to make a return on their investment. This great symbiotic relationship benefits all parties and creates some amazing opportunities for quick and profitable deals.
However, working with a Private Lender could have some drawbacks. Perhaps they are not as organized as larger banks or other entities that provide funding for real estate investments. Perhaps the rates are higher for these lenders? Or perhaps they don’t have the experience to support you in your projects and can’t foresee delays or obstacles down the road.
Overall, a Private Lender has a mix of both benefits and drawbacks. So what about a Hard Money Lender?
Hard Money Lenders
Hard Money Lenders are usually a larger institution that runs like a business. They have access to more funding than say a single private lender and usually release money in draws through a payment schedule for completed work.
Hard Money Lenders typically have higher rates and points in an effort to mitigate risk and thus are on average more expensive. However, they can offer much faster and more reliable movement than traditional lenders.
There is definitely some stigma around Hard Money Lenders, you might have heard the term ‘Loan Shark’. Since these entities are in the business of short-term and high-profit loans, there tends to be the narrative that details and people fall through the cracks. Anytime you are considering a lender, especially Hard Money, it is important to have some exit strategies and back up plans in mind.
Now, with all this information in mind, what is the best option for funding YOUR real estate investment needs? Well, at CPL we have a unique model that combines the best parts of these two types of lenders and provides our clients with individually tailored loans and mentorship along the way.
CPL Investments: the Hybrid Model
With over a decade of experience in the real estate investment arena, CPL Investments is a unique and progressive model of lending. We combine the structure and reliability of Hard Money Lenders with the speed and flexibility of a Private Lender, all with the purpose of support our clients to make the best deal possible. Our goal is to not only provide money for people’s projects, but to provide support and funding for their dreams and long-term goals. We want our clients to succeed now and in the future and to be able to scale up their business with the goal of reaching their next level of success.
When the world of funding feels overwhelming and it’s not easy to determine the best fit for you, why not have the best of both worlds? Reach out to CPL, meet our team of Hoosiers, and learn about our values and terms. We are person-centered and are willing to meet people where they are because when it comes to lending services, we know just how important every detail can be.