Fewer Requirements
Fast Funding
INSIGNIA Financial Services seamlessly provides real estate investors and commercial property owners fast, efficient access to a robust network of private lenders, family offices, and asset-based loans with flexible terms for a wide variety of property types.
Performance
We are client-centric and performance driven dealmakers. Your success is our success.
Specialization
We're seasoned lending professionals with thousands of loans funded.
Transparency
We provide a transparent engagement, diligence and closing process.
Certainty
Capitalize on more opportunities with greater certainty of execution.
Fewer Requirements
We finance a wide range of properties, including apartment buildings, single family rentals, vacation rentals, assisted living, hotels, mobile home parks, retail, senior housing, and more.
Our team arranges financing for real estate investors and business owners. We are flexible, easy to work with, and we’re highly experienced dealmakers providing our clients certainty of execution.
- Acquisition
- Refinance
- Construction
- Fixed rates
- Flexible Terms
- Limited documentation
Private Capital
- Opportunistic dealmaking
- Fund within 5 days
- Stabilized and Pre-stabilization
- Commercial and residential
- 6 - 24 month terms
- Foreign Nationals eligible
- Fixed rates
Bridge Loans
- Bankruptcy / DIP
- Discounted payoff
- Fixed rates
- Foreign Nationals eligible
- High leverage available
- Note acquisitions
- Terms from 6 - 24 months
Discuss your needs with an expert
Fix & Flip Loans
- Fixed rates
- Foreign Nationals eligible
- Interest Only
- Single or multiple properties
- Terms to 24 months
- Up to 90% LTC
Build to Rent
- Builder lines to $30MM
- Single asset loans to $2MM
- Foreign Nationals eligible
- Nationwide coverage
What is Private Lending?
Many real estate investors know that financing investment real estate is different than financing a primary residence. Among the differences is that many homeowners will seek out conventional mortgage financing, while real estate investors must often look for alternative forms of financing, whether commercial loans or private financing. That’s why as a real estate investor, it is crucial to understand how to fund deals using resources like private money lenders and private lending companies.
Who are private lenders and how exactly do private money loans work?
Private Money Lenders
Private money lenders are typically individuals who provide financing to real estate investors directly with their own funds. These individuals often times are experienced real estate investors or other professionals who are familiar with real estate investment, lending, and/or investments and are simply seeking a higher yield on their capital than they believe they can achieve in the publicly traded markets, such as stocks, bonds, and other investments.
Private Lending Companies
A private lending company is a non-bank financial institution that is in the business of taking funds from private investors and making private business purpose loans with those funds.
Oftentimes, the terms hard money lender and private lender are used interchangeably due to the similarities both possess. Both will lend based on the “hard asset value” or the property/collateral itself, but private money lenders will also take into account additional factors such as the borrowers’ credit history, available cash, and real estate investment experience and/or track record.
Private lending companies provide private credit to real estate investors from capital sources that may include individual accredited investors and structured credit from parties such as banks, hedge funds, and private equity firms.
Private Lending Misconceptions
There was once a negative connotation tied to private money lending and the industry’s reputation was associated with high interest rates. However, there are many benefits to working with a private lender:
Efficiency: Private lenders can typically fund a loan in 7 – 10 days
Less restrictive rules: Private lenders make loans for commercial business purposes to investors and commercial property owners, not consumers, and therefore are able to provide a less bureaucratic process and more creating financing solutions.
Value-add funding: Private lenders are able to make bridge loans for substantial rehabilitation, reposition, or stabilization, and can consider a property’s after repair value (ARV) or stabilized value in making a decision and determining loan size, including interest reserves.
The Downsides of Borrowing from Individuals
If you can find an individual investor to finance your project, that’s great, but here are several drawbacks worth considering.
Individuals generally have limited funds. At some point, they will run out of capital, and then you’ll have to find other investors.
Unreliability. You may be trying to close a deal and can’t get the funds because your individual investor is on vacation.
Their lack of experience with private lending can lead to legal action if anything goes wrong.
The pricing may not be lower than what you’d pay to a professional private lending company. Some individual investors have unrealistic yield expectations.
Individual investors don’t have a public reputation to maintain, so there is a higher risk of unethical behavior such as price gouging, bait & switch, or loan-to-own.
The Advantages of Private Lending Companies
While there may be benefits to borrowing from individual private lenders, there are clear advantages to borrowing from professional private lending companies. Many real estate investors and brokers refer to them as “hard money lenders,” but “hard money” is an unpopular term within the lending industry. While some companies embrace the term, most hard money lenders now prefer to be described as “Private Lenders.”
Lending Companies Don’t Run Out of Capital
Unlike individual private lenders, private lending companies are seldom without capital. Since they are in the business of lending, they are continuously recycling funds by one of several business models:
Fund and sell to institutions
Fund and sell to individual investors
Manage a mortgage fund (pools money from multiple passive investors)
Use a bank warehouse credit line
Syndicate each loan to multiple individual investors
Table funded by individual investors
Ironically, some private lending companies use individual investors to fund their loans, which can be considered brokering. This is a popular model in California and Arizona. Most of those individual investors would not work directly with borrowers because they prefer to have a license private mortgage professional underwrite and process the loans they invest in.
Private Lending Companies Manage Reputational Risk
One clear advantage of working with such private lending companies is that they have a public reputation to uphold, which tends to discourage unethical and unprofessional practices.
Private lending companies consist of a lending operation and their customer service is typically better than individual private lenders. Phone calls and written communications are equal or better than what you would expect to find with any institutional lender or bank. The private lending business is all about communication, expectations, and performance.
Private lending companies can be a great resource to real estate investors beyond just funding. If you plan to refinance into a long-term loan, they can refer you to a lender or arrange the refinance loan for you. Private lending companies can refer you to contractors and other key vendors if you need to assemble a team or need advice. Many private lending firms are managed by real estate investors who have substantial experience.
The reputation of private lending companies is a significant reason why they are typically recommended over borrowing from individual investors or individual private lenders. Many private lending companies belong to a private lending trade association that mandates its members to follow a code of ethics. Our industry has 2 major trade associations:
American Association of Private Lenders
National Private Lenders Association
The private lending industry is vast and far more complex than many people realize and operates with more sophistication today than ever.
We provide financing for nearly any property type and business or investment purpose.
Contact Us
The team at INSIGNIA Financial Services is available to discuss your real estate or small business lending needs and we’re available to answer any questions you may have.
Call Us
800-616-2050
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