Private Money Lending: When It Makes Sense and How I Assist

Traditional mortgage routes don’t always work for every situation, especially if you need fast financing or run into strict qualification roadblocks. Private money lending is a financing solution where individuals or private funds lend money for real estate purposes, typically using the property as collateral rather than strict income or credit guidelines. In this article, you’ll learn what private money lending is, how it compares to conventional options, when it makes sense in Washington County and nearby regions, and how I help borrowers navigate these unique loans.

Quick Answers: Understanding Private Money Loans

• What is a private money loan? It’s a loan funded by private investors or companies, secured by real estate, and underwritten primarily on the property’s value.
• Are private money loans the same as hard money loans? The terms are often used interchangeably, though specifics vary by lender and region.
• Who should consider private money? Borrowers facing time constraints, non-traditional properties, or challenging financial documentation may benefit most.
• Can you use private money for investment properties? Yes, these loans are common for flips, rentals, land acquisition, and more.
• How do the terms compare to conventional mortgages? Rates and fees are generally higher, but qualification and speed are usually much more flexible.

What Is Private Money Lending?

Private money lending refers to loans provided by individuals, investment groups, or specialty finance companies rather than banks or mortgage lenders. These loans are typically secured by a deed of trust or mortgage on the subject real estate—residential, investment, commercial, land, or even construction.

Unlike conventional mortgages, which heavily weigh your income, credit history, and loan-to-value, private money is generally more focused on the value of the property itself and your intended exit plan (such as selling, refinancing, or renting upon completion).

When Does Private Money Make Sense?

In my decades in the mortgage business here in Utah and the surrounding region, I’ve seen private money save the day in scenarios like:

• Purchasing a property at auction with a rapid closing deadline
• Fix & flip or rehab projects where the home isn’t currently eligible for traditional financing
• Complex or non-warrantable properties—such as unique builds in areas like Hurricane, Zion, or near Snow Canyon
• Bridge loans to cover a purchase before your current property sells (learn more about bridge loans here)
• Borrowers with recent credit events, tax issues, or income that can’t be fully documented
• Land loans or construction loans where bank guidelines are restrictive

As Ryan Bolton (NMLS# 299717), I assist clients in Washington County, St. George, Iron County, and surrounding areas in weighing when private money is a smart temporary tool—and building a plan for eventually moving to longer-term, lower-cost financing when possible.

How Are Private Money Loans Structured?

Most private money loans are short-term—anywhere from 6 months to a few years. The typical hallmarks include:

• Higher rates and points: Expect costs to be higher than conforming or government loans.
• Simple qualification: Decisions are based on equity, property value, project viability, and your exit strategy.
• Flexible documentation: These lenders may not require tax returns or W-2s, especially for investment property scenarios.
• Fast closes: Many deals can be funded much quicker than a typical mortgage—sometimes in a matter of days.
• Lower loan-to-value ratios: You often need more equity, or a larger down payment, than with a conventional loan.

Private Money vs. Conventional and Non-QM Options

If your scenario might work for a more traditional program but just need looser documentation, a bank statement program or other non-QM options may be worth exploring as well.

My Role: How I Assist With Private Money Loans

Private money isn’t for everyone—it’s a niche financing tool. My job is to help you decide if it fits your near- and long-term goals, to structure your application for success, and to connect you with reputable private lending options in Utah, Nevada, and Florida.

This means:

• Evaluating if private money is your best solution, or if a DSCR, jumbo loan, or other program might offer better long-term value
• Coaching you on documentation and preparing your package for fast approval
• Designing your exit plan—often a refinance or sale within 6-24 months
• Managing the process so your closing stays on track, even with unique properties or tight timelines

With over 27 years in mortgage lending, I’ve navigated almost every scenario, from unique homes in Entrada to rapid deals in downtown St. George. You aren’t supposed to know how all of this works—that’s why you have me!

What to Consider Before Choosing Private Money

• Understand your true costs: Private money is fast and flexible, but can be expensive. Calculate the projected return or utility before committing.
• Have an exit strategy: Know exactly how you’ll pay off the loan—whether by refinance, sale, or another plan.
• Work with a trusted local expert: Guidance can help you avoid lenders with hidden terms and structure your deal for future conventional eligibility.
• Think short-term: Private money is a bridge, not a solution for holding property over many years.

Typical Private Money Lending Process

1. Discuss your scenario and determine if private money fits your unique needs.
2. Quick property evaluation—lender reviews value and intended use/exit.
3. Submission of basic documents: usually title report, purchase agreement, and property photos or scope of work.
4. Lender issues preliminary terms—review carefully for fees, costs, and payback plan.
5. Loan closes, and funds are often available immediately at closing.
6. Begin working on your exit plan—refi or sale—right away to minimize holding costs.

Timelines are usually much shorter than standard mortgages—frequently within a week or two.

Areas Served for Private Money Loans

I routinely serve clients looking for private money loans in Washington County and the surrounding region, including St. George, Hurricane, Ivins, Santa Clara, Iron County, Apple Valley, Springdale, Cedar City, Kane County, Leeds, Toquerville, New Harmony, Kanab, and select nearby communities.

No matter if your property is by Sand Hollow, Bloomington Hills, or close to the Zion or Bryce Canyon region, I can help you understand if private lending, a DSCR loan program, or another solution is right for your next step.

Next Steps: Let’s Review Your Scenario

If you think private money might work for your purchase, investment, or refinance—let’s talk. Every scenario is unique, and I’m here to help you compare all available loan options, estimate your out-of-pocket, and plan your best path forward.

Call, text, or email anytime for a free review of your needs. If you’re moving fast, I can help you plan out your pre-approval and closing strategy so you’re never caught unprepared.

Frequently Asked Questions

This is educational and not financial advice. Loan programs and guidelines can change. Talk with a licensed mortgage professional about your specific scenario.