With only 20 days to help a client purchase a small mixed use property, Royal Bank referred a deal to us as they couldn’t complete their process in time to meet the deadline. The client is an experienced real estate investor who was able to get a discount on the price if he could close on the property quickly. We got to work and after ordering the appraisal we found a local private lender (a lawyer) to fund the deal. After the transaction closed we got to work on getting an approval for the refinance of the private financing. Even with fees and legal costs, the client was able to get a fully leased property for less than market value because the deal could close quickly.
Private financing can be helpful if used properly and for a short period of time. The interest rate is nominal in most cases however you should pay attention to the fees being charged as they can eat up equity quickly.