11 Private Lending Models for Real Estate Investors

The prospects for future growth in real estate private lending are good and getting better. Certain segments of the market are maturing, which means investors have better opportunities than ever before.

The Rise of Private Lending for Fix-and-Flip Properties

As an asset class, private lending emerged in the late 1980s. It started as a unique funding mechanism for mezzanine loans or special situation financing. Today, it’s a common method of funding fix-and-flip property deals with no signs of reduction any time soon.

REO: The Market Rebound

Supply is more constrained now, so the price per unit has gone up. Generally speaking, people aren’t buying REOs strictly on price anymore. An REO now goes for pretty much the same price as any other fixer-upper in the neighborhood.

Hawaii: Yes, People Actually Live There and They Need Places to Call Home

It should be noted that one unique feature of the Honolulu market is that multifamily real estate is almost an afterthought. While $608.8 million was invested in apartment construction in 2018, according to CBRE, that pales in comparison to the $1.6 billion funneled into retail and $2.4 billion into hotels.