When it is time to consider taking out a private loan, most investors' biggest concern is whether or not they will qualify for the loan. So say you DO qualify. Have you ever considered before taking out a private loan if the private lender you are considering borrowing money is actually qualified to lend you money? Maybe it's time you took this into consideration the next time you are considering taking out a private loan. Borrowing private money as an investor or just as a regular Joe who needs a leg up and for whatever reason would rather deal with a private lender rather than a traditional bank is a big deal. So why not make sure that the private lender you are considering borrowing money from possesses the following 6 qualities?
Honesty - They Are Trusted
Before you take out a loan with a private lender, investigate their reputation. In our modern times you can find out anything you want about anyone, and there is no better reason to check out the online reputation of your potential private lender than to protect yourself. Google their name. If they have done a decent amount of deals they will have reviews and/or opinions online about the way they behave during the lending process and how they treat their borrowers.
Responsiveness - Get the Deal Done
Business deals are usually time-sensitive matters. As such, most parties are interested in consummating them as quickly as possible. Everyone understands the need for due diligence but no one should needlessly prolong the finalization of a deal due to neglect or indecision. A swift answer, even if negative, is always appreciated.
Patience - Wait for the Right Deal
It sometimes hurts to pass up a seemingly lucrative deal. Nevertheless, wait for one that meets your financial goals and also fits your risk tolerance. The interest lost over a few weeks or months will be repaid many times over by a deal that leaves you unstressed and comfortable. When borrowing money from a private lender, patience truly is a virtue.
Flexibility - Make the Deal Work for Everybody
One of the main advantages of private money lending is the flexibility it affords borrowers. Of course, you should never enter a deal that you don’t understand but an open mind to alternative, non-traditional financing options will deliver a greater variety of loans for the investor or borrower to choose from. In short, an astute investor or another type of borrower with flexibility will see far more deals than one who is bound by his own wrong preconceptions.
Fairness - a Win-Win Situation is Best for Everyone Involved
Recognizing the fact that private money lending is an ongoing process and not a “one-shot” deal is the first step for a successful investor or another type of borrower Private money lending is based on relationships. The most successful investors and borrowers understand that the long-term gains will overshadow any accommodations made in the short term. It is imperative to understand that the borrower and the lender must find common ground that benefits them both.
Experience - The Culmination of All the Others
“Experience” is an overused and often misapplied word. In the case of private money lenders, it is quite simply the combination of all the previously mentioned attributes. Do not simply find an “experienced” private money lender. Instead, find one who is honest and responsive, has patience and flexibility, and deals fairly and you will find the best, most experienced private money lender of all for your private lending needs, whether as an investor or just a regular Joe needing a private loan.
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