and other loan terms can usually be negotiated based on the mutual agreement between the borrower and the lender. They are usually more willing to work with a borrower in troubled times. 3. Varied interest rates. Rates for private money can vary widely depending on the lenders’ preferences and the borrower’s financial situation. Equity pieces in your deal can also be an option because private lenders can be more creative. 4. Relationship building. Private money loans provide an oppor - tunity to build relationships with individual investors, who may very well become long- term partners, mentors, and sources of future financing. No matter the lender (i.e., family, friends, acquaintance), always make sure your note is in writing. No handshakes— preserve the relationship. Hard money loans are typically obtained from specialized lenders, while private money loans are sourced from individuals who are willing to invest their own funds in real estate ventures. Some lenders, like us, are a combination of both. All types of financing can be beneficial. Terms and conditions of hard and private money can vary significantly from one lender to another. Be sure to create relationships with both types of lenders, because every investment is different. For more information, contact wendy@chmlending.net or bill@chmlending.net. www.carolinahardmoney.com •
The key characteristics of hard money are: 1. Collateral based. Many hard money loans are asset-based, meaning the loan is based on the value or potential value of the property itself and not as much on the borrower and their credit score. Turnaround times are typically shorter; these loans are known for their quick approval 2. Faster and more flexible. and funding process. They may be more flexible in their lending criteria compared to traditional lenders. 3. Loan terms. Typically, the term is between 6 to 12 months, and some lenders may offer longer terms. Rates range (as of this writing) between 9% and 18%— and even higher in some cases. 4. Funding source. Hard money loans are often funded by private lending companies or individuals who specialize in private real estate lending. These lenders usually have specific criteria and guidelines for approving loans. Private money often refers to loans funded by private individuals or small groups of investors. They can be friends, family members, acquaintances, and other individuals in the borrower’s network that have self-directed funds or cash. Private money characteristics are as follows: 1. Relationship based. Private loans
Bill Fairman is owner/co-founder of Carolina Hard Money, a private company that specializes in short-term purchase loans with a construction
component. Fairman is also a principal of Carolina Capital Management and the manager of Carolina Capital Reserve Fund I, a private-pool mortgage fund created to raise capital from accredited investors and deploy it into real estate-secured loans. He is responsible for raising capital and managing the day-to-day operations of the fund and management company. A regular speaker at real estate investor and private lending events across the country, Fairman has 30 years of mortgage experience, including residential and commercial transactions, including wholesale.
Wendy Sweet has been lending funds to investors since 2001 as both a
conventional lender and a hard money lender. In 2008, she opted to focus on growing her hard money company, offering funds to investors who were able to navigate the changing world of real estate. She and her business partner/brother Bill Fairman have been successfully lending money in the southeast to landlords, rehabbers, builders, and commercial investors and managing a real estate fund for accredited investors. Sweet also operates a subsidiary for fixing and refinancing short-term rentals in addition to self-storage facilities. Sweet has been a licensed real estate broker in both Carolinas since 1981.
Jonathan Davis is the president, CEO, and a principal of Carolina Capital Management and Carolina Hard Money, a private money lending company that
lends on assets from single-family fix-and-flips and rental loans to commercial assets ranging from multifamily to developments. He brings a unique perspective to his portfolio management style, having first cut his teeth in loss mitigation for the non-performing servicing industry.
are often based on personal relationships between the borrower and the lender. They either know them personally or through a referral.
2. Flexible terms. Interest
rates, repayment schedules,
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