As a former builder and developer and from personal experience, I can say that no matter how big or small a development company is, one thing remains the same: builders and developers always need money to fund their projects. As the lending industry has evolved over the years, it has become increasingly difficult for builders and developers to get the money they need through traditional banks and financial institutions - this is where private lenders and hard money loans come in.
Private Lenders vs. Traditional Financing
While conventional construction loans are issued by traditional banks and financial institutions, hard money loans are provided by individual investors and/or private lending funds.
Hard (private) money construction loans are secured by the land and the project to be built. Although those loans charge a high interest rate when compared with loans from a bank, those projects get usually funded in matter of days vs. traditional banks that often take more time.
Since time plays an important role in the construction industry, some of the most successful builders and developers with a strong financial background and easy access to traditional loans opt for hard money loans to fund their new construction projects. Why? Because of speed, flexibility and no red tape.
Funding a loan fast can often be the difference for a builder/developer when deciding between a hard money loan or a traditional lender.
While most hard (private) money lenders can fund construction loans within a week without stressing out, some banks often take 30 days to get approvals, plus and another 30 days or more to get the funds builders need.
With over two decades of “boots on the ground” expertise and first-hand experience, our team brings well-researched CRE investment opportunities to both, our funds’ Investors and the real estate community we serve. Our “best-of-class” team is well-versed in the industry with experience in site selection, design, development, construction, structured finance, source of funds (equity and debt), owning and managing both, residential and commercial real estate.
We are from Texas, and proud of it. Knowing the geographical areas that we serve and invest on is key. We believe that developing long-lasting relationships within the industry is essential to successfully navigate the CRE. From Dallas all the way to the Rio Grande Valley, (including Houston, Austin, San Antonio, Corpus Christi and Laredo) Capital Insiders team has developed a strong network of professionals throughout the Lone Star State.