Borrowers

There are three types of Borrowers that we lend to at Private Lender of New England, LLC: the flipper, no institutions, and holder borrowers.

The "Flipper" Borrower

The flipper is the most common borrower we work with on residential properties. The flipper is a borrower who will purchase a distressed property at a great value, rehabilitate it, and place the home back on the market within a three to six month period for resale. Our private lenders usually do not require the borrower to provide information such as credit checks, tax returns, or income verification. The lender is primarily lending on the property's ARV (after value rehab).

The "No Institutions" Borrower

This type of borrower may need to move fast on a deal and may not have the time, energy, or desire to go through the long approval process that most institutions will take the borrower through. They would rather pay more in interest and terms to get the deal done quickly and figure the extra cost into their overall net profit on the project. Most of these borrowers are larger or more experienced investors.

The "Holder" Borrowers

Many residential and commercial lending institutions will not extend credit on properties that are vacant and need substantial rehabilitation. In addition, traditional lending institutions prefer 6-12 months seasoning before allowing the borrower to refinance. We typically see this type of borrower refinancing apartments and commercial and office buildings. However, we have some borrowers who will employ the same refinance strategy with one to four units. These borrowers often use our services to procure the investment property because of our speed, flexibility, and rehab funding options. Usually, our private lenders will want more information on these types of borrowers because they want to see some indication that it is realistically feasible that they could achieve institutional financing within a year or two. Many private lenders will look at commercial institutional pre-approvals with this type of borrower.

Rehabilitation Funding

We like to be involved in financing rehab into distressed loan properties. There are many cases in which more than $10,000 in rehabilitation work must be completed. In those circumstances, we will require the rehab to be privately refinanced into the loan our private lenders will often require the rehab to be privately financed into the loan. The reason is that we don't want to finance investors who will convert distressed properties into slum properties. The end result should achieve a successful community development project as well as a profitable investment.

The private funding of rehabilitation is evaluated by both Private Lender of New England and the investor. The goal is to bring the property up to FHA financing standards once the rehabilitation has been completed. The investor and the private lender work through a detailed rehab schedule of draws. Once an agreed upon draw schedule is in place, the investor can draw after the first phase of the draw is completed. In some cases the private lender will release some start up rehab funds. Since we are dealing with private lenders, the turn around on draw payments is usually a matter of days, not weeks.

How Do I Get Started?

It's easy! Just contact our company and we will move rapidly. The nature of this business is to close in less than 30 days, and we usually do. You should have a property in mind, preferably under contract, prior to contacting us. Once we get an overview of the project, we will ask you to fill out a basic application in order to get an overall profile of you.

Secondly, a representative of Private Lender of New England will review the property by previewing the property or site. Finally, we will conduct an internal evaluation of the project to figure out where to most successfully place the loan. All our private lenders like to work with certain types of properties and borrowers. To ensure a successful relationship between the lender and the borrower, an evaluation becomes an important part of the process. Think of us as a service that connects borrowers and screened private lenders who continuously demonstrate honest and ethical private lending practices. Most of our private lenders have had experience with our loan placement and they understand that if we send them a loan, it has already been pre-screened for its viability. Our private lenders prefer this method so they do not waste their time. Borrowers like this method because their loans do not get shopped around from one private lender to the next, costing them large non-refundable preview, appraisal, and processing fees. Finally, we issue the borrower a written term commitment and, if agreed to in writing, we can usually close once the borrower can obtain title insurance. We compete with cash buyers so we must close in the same time period. And guess what? We do!

Borrower Terms

The rates and points differ from borrower to borrower, private lender to private lender, and it also depends on the property. Each loan is evaluated individually by Private Lender of New England, LLC. All the private loans are short term, one to three years, and are interest only, usually with no prepayment penalties. The down payments range from 10%-20% depending on the private lender and property.