Private Lending: Expert Insights with David Lichten and Harrison Smith

In this article, we will explore the concept of private money loans and non-traditional sources of capital and how they can be a bridge to success for borrowers in need of financing. We will discuss the advantages and disadvantages of working with non-traditional lenders, the role of a private lender broker, and the importance of building strong relationships in the lending industry.

Non-Traditional Sources of Capital

Non-traditional sources of capital refer to alternative financing options that are not provided by traditional banks or conventional lenders. These sources can include high-net-worth individuals, private equity firms, and other non-bank entities. The main advantage of working with non-traditional lenders is their ability to provide financing for projects that may not meet the criteria of traditional banks. For example, a high-net-worth individual may be willing to lend to a borrower on a project that a traditional bank would not approve.

However, it is important to note that non-traditional lending typically comes with higher interest rates and fees compared to traditional bank loans. This is because non-traditional lenders are taking on more risk by providing financing to borrowers who may not meet the strict criteria of traditional banks. Borrowers should carefully consider the cost of borrowing from non-traditional sources and weigh it against the potential benefits.

The Role of a Private Lender Broker

A private lender broker, like David Lichten of Kennebec Realty Capital, plays a crucial role in connecting borrowers with non-traditional sources of capital. Unlike traditional banks, private lender brokers focus on the collateral and assets involved in a transaction rather than solely relying on a borrower's personal financial statement and credit history. This can be particularly beneficial for self-employed individuals or those with unconventional income streams for real estate loans.

Private lending companies and lender brokers also offer a level of flexibility and agility that traditional banks may not be able to provide. In situations where bank financing is not feasible due to strict timelines or the bank's unwillingness to take on certain risks, private lender brokers can step in and bridge the gap. They can help borrowers secure financing quickly and efficiently, ensuring that they don't miss out on valuable opportunities.

Pros of Private Money Lending

The private money lender can be more flexible with borrowers than other types of loans. Criteria for borrowers are increasingly low, especially if the borrower is a friend or family member. A private money lender is more likely to offer financial assistance for distressed properties that need significant renovation or repairs. This allows investors to buy low-cost properties, as well as to make renovations that improve property values. The flexible nature and availability of private loans make this even easier. The borrower has the ability to complete a contract within just days, and not have to wait weeks for financing from a conventional mortgage to repay.

Building Strong Relationships in the Lending Industry

One of the key advantages of working with a private lender broker like David Lichten is the personalized and consultative approach they offer. Rather than simply pushing loans onto borrowers, private lender brokers act as consultants and support resources. They take the time to understand the borrower's goals and evaluate the viability of their projects. This includes considering factors such as the highest and best use of the property, potential conversion opportunities, and market conditions.

Private lender brokers also provide guidance and advice to borrowers, helping them make informed decisions. They may suggest alternative strategies or options that the borrower may not have considered, such as splitting property or connecting them with the right subcontractors. The goal of a private lending company is to create the most advantageous scenario for all parties involved, ensuring long-term success and profitability.

It's important to note that private lender brokers like David Lichten prioritize the best interests of the borrower. They are not solely focused on closing deals and collecting interest payments. Instead, they aim to build long-term relationships with borrowers and help them succeed in their own real estate investment endeavors. This means that they may sometimes say no to a deal or encourage a borrower to explore other options, even if it means they won't earn immediate income from that particular transaction.

By consistently demonstrating their trustworthiness and commitment to the borrower's success, private lender brokers like David Lichten can establish themselves as valuable resources in the industry. Borrowers appreciate honesty and transparency, and they are more likely to refer others to private money brokers in the future.

Non-Traditional Sources of Capital

Non-traditional sources of capital, such as private lenders, can be a bridge to success for borrowers in need of financing. Working with a private lender broker like David Lichten of Kennebec Realty Capital offers several advantages, including flexibility, personalized guidance, and access to financing options that may not be available through traditional banks. By building strong relationships and prioritizing the borrower's best interests, private lender brokers can help borrowers navigate the complex world of real estate financing and achieve their goals.

To get in touch with David Lichten and explore non-traditional financing options for real estate investors, visit the Kennebec Realty Capital website or contact him directly at 917-613-2130.

Harrison Smith

eXp Realty

Harrison@ExploreMyTown.com

+1 (207) 956-0872

112 Main Street, Suite 201 Biddeford, ME 04005