Either the property vacancy rate, condition, or loan size doesn't currently fit the institutional lenders requirements.

You need your money this month and don't have the time to meet the typical loan period of and institutional lender which can run from 3 to 6 months. The Borrower is temporarily credit impaired or cash flow impaired, etc and can't show the bank how they can make their payments and meet an institutional lenders debt service ratio requirements. The property doesn't qualify until it is leased up and the rent roll seasoned to meet the requirements of the institutional lender.

Many private money Borrowers could borrow institutionally but find the simplicity, ease and speed of private money borrowing fits their requirements better on developing properties than conventional loans. Private loans usually have lower appraisal fees, little or no environmental fees, engineering fees and legal fees.

Tip: Always ask your service provider if they carry Errors and Omissions insurance. If their answer is no, ask for their current financial statement. In case of a mistake if there is no insurance, their net worth is the only thing you can hope to recover from them if you are damaged by their service.