CALIFORNIA CITY Calif. - Sept. 29 2015 - PRLog -- California private money loans for real estate are as popular as the rest of the states. There are numerous reasons that one applies for a private money loan but I am going to give you 3 common ones.Here we go. They are not in any special order of importance because they are all important reasons:Speed and TimingMost of us private money lenders fund many deals that have to do with a bank either owning the property (REO) or the seller doing a short sale that the bank has to approve. A short sale is where you owe more money than the property is worth and the agent or seller takes many months to get the bank to agree to take less.In the case of an REO the bank already issued a notice of default and the seller still didn''t pay so they went ahead and foreclosed. REO stands for Real Estate Owned. In each of these cases the bank gives a sale date and that date is firm. Since it takes many months to actually get this date especially in a short sale you most likely do not have time for a conventional loan.I have had a few cases where the buyer didn''t come up with the down payment in time for the closing. The agent who has negotiated the short sale has to go back to the bank and try to get a new closing date. The person at the bank has people he or she has to answer to and it''s usually not a pretty process. It could kill the deal that everyone has worked so hard to get.The other part of speed has nothing to do with a shortsale or an REO. Often times your purchase offer to buy a property is competing with a cash offer. While the cash offer is usually a lower offer (not all the time) the cash offer can not only close quickly there is no loan contingency. A loan contingency can allow the buyer to back out of the real estate deal without penalty when the loan is not approved at the last minute. Many listing agents in a seller''s market will usually push the seller to accept the cash offer or the Private money loans offer.Credit Driven and Income Verification LoansCredit is always a big deal when applying for a conventional loan. With private money loans it hardly means anything. We have approved people with lower than 500 FICO scores. These loans are equity driven. If you have enough money for a down payment you can get the loan with private money. If you have a billion dollars in the bank but your credit is bad and you show no or little income on your tax returns believe it or not they will not give you a conventional loan.Many self-employed people have good credit but their tax returns are terrible. They either have so many write offs like having the company pay for their cars their gas cell phones some meals etc so they don''t have to take a large salary. Some people even have cash businesses that they sometimes fail to report all the cash which will lower their yearly reportable income.So the self employed want to pay minimal taxes AND get the 3.75% 30 loan. I''m sorry but it doesn''t work that way. That''s where they come to us and pay a higher interest rate with private money. Eventually they have to pay one way or another.Foreign Nationals sometimes have no credit score. It would be pretty impossible for a bank to give someone a conventional loan without a credit score. The Foreign National has to have their money already in a US bankto get a loan with us.Pre payment PenaltySome regular loans have a long prepayment penalty. They could be up to 2 years. What that means if you pay the loan back before the end of that 2 year period you can face a severe financial penalty. Initially when you are getting the loan you know for sure that the 2 year pre payment penalty won''t be an issue because you are going to keep the loan for a long time.Well things happen as they say. We usually offer a 3 month pre payment penalty and it is really an interest guarantee. If the borrower paid us back in 2 months with the 3 month prepayment penalty they would just owe us for the remaining 2 weeks interest. Sometimes depending on the conditions our investors want a 6 month interest guarantee. Our clients who fix and flip home like the 3 month option.In summary private money loans are getting very popular. You can obtain that property quickly and that''s what the goal was in the first place. For more information call George Kengott at 619-987-8639 or go to www.cahardmoneynow.com