Advantages of Hard Money Loans vs. Private Money Loans

[Dan Kieres]

Found a great article detailing the pros and cons of both Hard Money and Private Equity. Enjoy!

http://www.finweb.com/loans/hard-money-vs-private-money-in-real-estate-investment.html#axzz3375gYG6A

[Jeff S.]

I'm not sure what state this author is writing about, or even what planet he's on, but it's clear he hasn't a clue about lending. Even if you want to buy into the silly definitions, you cannot borrow money from a "private lender" and "use it as you see fit."

Unless grandma knows to comply with the SAFE Act, Dodd-Frank, RESPA, TILA, and a host of others, she better make sure you are using the money for a business purpose only, if it's going toward real estate. The author, who is mercifully anonymous, clearly believes that the only difference between borrowing from a private party and a hard money lender is your negotiating ability and control.

He states, "If you are the type of individual that likes to have control over everything, you may want to work with a private lender. However, if you just need access to money and you do not care about having to follow some rules, a hard money lender could be beneficial."

Oh, those pesky rules. Good thing only hard money lenders have to follow them.