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What is PML?
A private money loan is a loan given to a real estate investor. The loan is always secured by real estate. Typically a lender is given a first or second position mortgage that secures their legal interest in the investment. There are other legal documents that are also further secures the transaction. Some examples are a promissory note, a joint venture agreement and a personal guarantee. Through private money lending, you have the Opportunity to become the bank.
WHY WOULD AN INVESTOR NEED A PRIVATE MONEY LOAN?
Private money loans allow investors to purchase low-priced properties, renovate and then re-sell. Private money lending is faster and more flexible than a traditional bank loan.
How does it work?
FIND a property
EXIT strategy is important
EXIT strategy is important
Investors find an extremely undervalued property they want to purchase. They borrow the funds to purchase and rehab the property, adding value to the home as they complete the renovation.
EXIT strategy is important
EXIT strategy is important
EXIT strategy is important
Investors will determine the best method for exiting their renovated property. The sale of the property or a refinance of the property are top methods.
PAYBACK to Lender(s)
EXIT strategy is important
PAYBACK to Lender(s)
Investor uses funds from the sale or refinance to payback the lender their principal along with their agreed upon interest.
