Hard and Private Money Lenders in Arizona

If you have ever found yourself looking for extra money in Arizona, you might have considered looking into money lenders or hard money loans. However, a lot of people decide against these things because they don’t know what they are or what they mean.

Today, you are going to find out all about hard money loans, private money lenders, the rules to getting money from these places, and what you can expect.

How Does a Private Money Lender Differ from Hard Money Lenders?

While these two options sound very similar in context, there are still a few differences. But what exactly are these differences? You can’t be expected to choose one over the other without having an idea of what each is going to give you. So here are the differences between the two:

What is a private money lender and how do they work?

A private money lender will usually give you whatever money you are seeking as long as you are a trusted citizen who has always paid back debts that you have previously owned. You don’t always need past debt experience in order to receive a private money loan, and you don’t need to risk your home or company on it either as it is a private investment so it is all on you rather than your property.

This is why a lot of people, who do know the difference, will usually choose the private money loan route. It is safer, easier, and less stressful when you are getting close to a payment that is due.

How do hard money loans work?

When you are trying to get money from a hard money loan, you have to have something set in stone for you to risk in order to assure the investors that you are going to pay them back. This usually means a home or a business.

It doesn’t always mean that you have to have a house or company to place down as insurance, but hard money loans won’t usually accept a car as a trusted payback method unless you are asking for a very small percentage of cash.

What benefits do Private money lenders offer?

One of the best benefits you get from going to private money lenders in Arizona is that you get quick money back.

When you are going to a private money lender, you are looking for something that can get you what you need fast, and that is exactly what you can expect from a private money lender.

However, this is only one single benefit that you get when you go to a lender, these are a few others:

You will likely receive more money from a private investor than you would from a bank or hard money loan
It’s safe and secure, while still allowing you to handle your business privately
It’s an easy loan to get if you know the right people

Arizona Private money laws:

Before dedicating your hard-earned money to a private loan, you should always make sure that you know the laws. You don’t want to overstep any boundaries that might be hidden below all of the paperwork.

And you want to make sure that the people that you are getting money from are also following these laws so that you aren’t being tricked anywhere within this deal. Here are a few laws you need to know:

You must have a good reputation in order to receive one of these loans
You must be an Arizona resident in order to collect a private money loan in the state
You should always be ready to pay back what you borrow from investors when they request it

There are many laws that you need to look into in order to be ready for this investment, but these are a few basic laws to get you started on this research.

Your Level of Commitment

You have to also be aware of how much commitment it is on your part when you are looking for private money lenders. You will likely get the loan that you are asking for, but are you in the place where you are willing to commit and pay it all back once you get what you need? There is usually a payment plan, but that’s even more commitment to remember and keep up with.

The Profitability of the Property

You will need to discuss things with the private investors, or hard loan investors, in order to decide whether or not your property is worth the same, or more, than the amount of money that you are asking for. To find this out, you will need to hire an inspector and an appraiser to see where they would put the house if it were on the market. If the price is above what you are asking for in an investment, there is no reason that the investors would say no. As I mentioned earlier, it is much easier to get a loan from a private investor, so this should be an easy test to pass.

Your Level of Risk

When going with a private money lender, your risks are very small and subtle. It isn’t something that you will wake up and go to sleep every single day thinking about, but it is something that you will remember to pay off.

Unlike hard money loans, you aren’t under a large amount of stress when you are taking money from a private investor. This is because private investors are usually more relaxed, not looking for immediate payback, and aren’t looking to gain a fortune on your desperation.

If you are seriously considering going with a private money lender, then your risk levels are minimal. You won’t lose your belongings as easily as you would if you were going with hard money loans.

Essential Documents required for Buying the Loan in Arizona

You will need a few documents in order to get a loan in Arizona. If you thought this was going to be a quick meeting where you walk into the office and walk out 5 minutes later with money, I hate to disappoint, you will need a few more things with you.

Most recent W2 forms, the previous 2 years are required
A copy of your ID
At least 2 months worth of account statements to clarify that you do need this money

There are more things required, but these are the top 3 that you need to be prepared to bring along with you to get this loan.

Apply for a private money loan with someone you trust

Finally, you want to make sure that you are going into business with someone who is reliable and trustworthy. You might not know anyone personally that you can take a loan, so go with a business that you know won’t let you down at the end of the day. Do your research, but you will realize soon after that there aren’t much better options for a private money loan than what you see right under your nose.

There you have it. You are now well on your way to getting a private loan for whatever business you need to take care of. Make sure that you do the further research required so that you are not left in the dark anywhere when it comes time for this meeting to finally take place.