Frisco, TX, is one of the fastest growing cities. Learn about Frisco real estate opportunities in this market overview.

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Frisco, TX - Real Estate Market Overview - OfferMarket

Frisco, TX

**Last updated:** May 4, 2022

 

A fascinating 13 year bull market has finally given way to deteriorating market conditions both in the real estate sector and the broader economy. In this report, we'll look at market data to understand how various real estate investing strategies have fared since the COVID-19 pandemic began. Our focus, in line with our [real estate investing platform](https://www.offermarket.us/), will be on single family residential real estate.

 

The COVID-19 pandemic-fueled housing bubble has shown signs of mania, with retail buyers (people buying personal residences), [iBuyers](https://www.offermarket.us/real-estate-glossary/ibuying), [REITs](https://www.offermarket.us/real-estate-glossary/reit) and and Wall Street investment firms collectively bidding up the value of homes to levels that are -- in many geographic markets -- rather concerning.

 

For more insights into the health of the US housing market, US consumer and broader US economy, review our [Federal Reserve Economic Data Dashboard](https://www.offermarket.us/blog/federal-reserve-housing-market-economic-data).

 

## Investment Comparison: Real Estate vs PropTech vs Stock Market

 

There are many different ways to invest in real estate and performance certainly varies.

 

## PropTech Stocks

 

[PropTech](https://www.offermarket.us/real-estate-glossary/proptech), short for property technology, has received record amount of private investment from venture capital firms and the asset class was front and center among the 2020-21 SPAC merger boom.

 

## PropTech Stocks 1-Year Returns

 

Compass, the technology-enabled real estate brokerage IPO'd with a market cap of --, that market cap has shrunk by 71% in the past year.

 

**Opendoor**, the leading iBuyer, has seen its market capitalization decline by 65% over the same timeline.

 

**OfferPad**, the second largest pure-play iBuyer has halved in value over the past year.

 

**Zillow** stumbled 69% over the trailing 12 months and shut down its Zillow Offers iBuying business. Related content: [Reading Between The Lines: What Zillow's iBuying Pause Really Means](https://www.offermarket.us/blog/reading-between-the-lines-what-zillow-ibuying-pause-really-means)

 

**Redfin** is down a remarkable 84% over the past year, also running into difficulties with its RedfinNow iBuying program.

 

Looking at these specific examples, we see three core items that have destroyed shareholder value:

 

### Record Low US Housing Inventory

 

The number of active listings in the United States is down from 1 million units in January 2020 to under 400,000 units in March 2022.

 

<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=NVDj&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

 
 

### Doubling of Mortgage Interest Rates

 

<iframe src="https://fred.stlouisfed.org/graph/graph-landing.php?g=OMYo&width=670&height=475" scrolling="no" frameborder="0" style="overflow:hidden; width:670px; height:525px;" allowTransparency="true" loading="lazy"></iframe>

 
 

### iBuying Has Been Exposed As A Deeply Flawed Business Model

 

The unit economics of iBuying are alarming. Most of these companies lose money on a per unit basis. iBuying is effectively unprofitable (to marginally profitable at best) home flipping at scale. For more on this, we recommend reviewing [Mike Del Prete's Research](https://www.offermarket.us/blog/mike-delprete-research-ibuyer-power-buyer).

 

## Mortgage Stocks 1-Yr Returns

 

**LoanDepot** is down -85% on concerns about the impact that rising interest rates are having on refinancing demand, and low purchase transaction volume due to record low housing inventory.

 

**Rocket Companies**, parent of Rocket Mortgage and Quicken Loans, is down -61% for the same reasons. 

 

**United Wholesale Mortgage** is down -55% for the same reasons.

 

This is what happens when housing inventory reaches record lows and a major interest rate spike eliminates refinance demand.

 

## Owning Actual Real Estate 1-Year Returns

 

Meanwhile, owners of real estate have performed convincingly well over the past year. The Case-Shiller Home Price Index is up over 19% over the past year -- an unprecedented appreciation driven by low inventory and increased demand.

 

Landlords have seen median rental income increase more than 5% over this time period.

 

Passive real estate investors have seen REITs outperform the market:

 

- Vanguard Real Estate ETF (ticker: VNQ): +5%
- Invitation Homes (ticker: INVH): +14%

 

## Stock Market Performance 1-Year Returns

 

- S&P 500: -1%
- Dow Jones Industrial Average: -3%
- Nasdaq Composite: -12%

 

## Real Estate vs Real Estate Services vs Stock Market

 

Owning real estate may be a better business model than facilitating real estate transactions, and in the past year has proven to be a better asset class than the broader stock market.

 

We believe everyone should have real estate in their portfolio.

 

## Follow On Twitter For Real Estate Insights

 

<blockquote class="twitter-tweet"><a href="https://twitter.com/hashtag/proptech?src=hash&amp;ref_src=twsrc%5Etfw">#proptech</a> stocks 1-yr returns: <a href="https://twitter.com/search?q=%24COMP&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$COMP</a> -71%, <a href="https://twitter.com/search?q=%24OPEN&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$OPEN</a> -65%, <a href="https://twitter.com/search?q=%24OPAD&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$OPAD</a> -50%, <a href="https://twitter.com/search?q=%24Z&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$Z</a> -69%, <a href="https://twitter.com/search?q=%24RDFN&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$RDFN</a> -84%&mdash; Daniel Sperling-Horowitz (@dwshorowitz) <a href="https://twitter.com/dwshorowitz/status/1520970716547805184?ref_src=twsrc%5Etfw">May 2, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

 

<a href="https://twitter.com/OfferMarketUS?ref_src=twsrc%5Etfw" class="twitter-follow-button" data-show-count="false">Follow @OfferMarketUS</a><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

 

<a href="https://twitter.com/dwshorowitz?ref_src=twsrc%5Etfw" class="twitter-follow-button" data-show-count="false">Follow @dwshorowitz</a><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

In this report, we'll look at market data to understand how various real estate investing strategies have fared over the past year.

PropTech vs Rental Property Investing | OfferMarket Blog

Real Estate vs PropTech vs Stock Market

**Last Updated:** February 09, 2025

 

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[Private lenders](https://www.offermarket.us/blog/private-money-lenders) play a crucial role in the financial landscape, offering alternatives to traditional banking institutions. With a growing number of individuals and businesses seeking quicker access to funds, these lenders provide flexible solutions tailored to specific needs. They often cater to those who may struggle to secure financing through conventional means, making them an attractive option for many.

 

Understanding private lending can empower borrowers to make informed decisions. From real estate investments to personal loans, private lenders can offer competitive rates and streamlined processes. As the demand for accessible financing continues to rise, knowing how to navigate this unique lending space becomes increasingly important for savvy borrowers.

 

![Private Money Lending Fast, Flexible Real Estate Financing.jpg](https://cms.offermarket.us/uploads/Private_Money_Lending_Fast_Flexible_Real_Estate_Financing_409a5f4572.jpg)

 

## **Understanding Private Lenders**

 

Private lenders play a crucial role in the financing sector, offering alternative options for borrowers. These [lenders](https://www.offermarket.us/blog/private-lender) provide flexible loan solutions, making them attractive to those who face challenges in securing traditional bank loans.

 

### **Definition of Private Lenders**

 

Private lenders include individuals or organizations that provide loans without being part of a traditional banking system. They typically focus on personal loans, real estate financing, or [business loans](https://www.offermarket.us/blog/private-individuals-that-loan-money#:~:text=terms%20and%20conditions.-,Business%20Loans,-Private%20individual%20business). Unlike banks, private lenders often prioritize quick decisions, less stringent credit requirements, and a more personal approach.

 

### **Types of Private Lenders**

 

Several types of private lenders exist, each serving different needs:

 

1. **Hard Money Lenders**: They offer short-term loans, often backed by real estate. [Interest rates](https://www.offermarket.us/blog/dscr-interest-rates) tend to be higher than traditional loans. 
2. **Private Equity Firms**: They manage investment funds that lend capital for projects or business operations. They usually work with larger amounts and specific investment criteria. 
3. **Peer-to-Peer (P2P) Lenders**: They connect borrowers with individual investors through online platforms. These lenders enable personal loans often with competitive rates. 
4. **Private Mortgage Lenders**: They provide loans for real estate purchases without relying on banking institutions. These lenders may cater to borrowers with non-traditional credit situations.

 

These various types of private lenders create diverse options tailored to meet different financing needs effectively.

 

## **Advantages of Using Private Lenders**

 

Private lenders offer distinct [benefits for borrowers](https://www.offermarket.us/blog/borrower-benefits-dscr). They play a crucial role in providing financial solutions that might not be available through traditional banks.

 

### **Faster Approval Process**

 

Private lenders often provide quicker approval times compared to banks. They can assess applications and make decisions within days, sometimes even hours. This speed allows borrowers to access funds when urgent financial needs arise. With fewer bureaucratic steps, private lenders streamline the application process, making it easier for individuals and businesses to secure necessary financing.

 

### **Flexible Terms and Conditions**

 

Private lenders typically offer more flexible terms and conditions than traditional lenders. They adjust loan amounts, repayment schedules, and interest rates based on individual circumstances. This adaptability makes it easier for borrowers to find loans that fit their specific situations. Whether it’s a short-term loan for an immediate need or a longer-term investment, private lenders can cater to diverse borrowing requirements.

 

## **Disadvantages of Private Lenders**

 

Private lenders come with several drawbacks that borrowers should consider before pursuing loans. Understanding these disadvantages helps in making informed lending choices.

 

### **Higher Interest Rates**

 

[Higher interest rates](https://www.offermarket.us/blog/rising-interest-rates) are a common concern with private lenders. While these lenders provide fast access to funds, their rates can be significantly higher compared to traditional banks. For instance, private loans may range from 8% to 15% or more, depending on the lender and borrower's credit profile. This increased cost can lead to larger total repayments over the loan's duration.

 

### **Less Regulation**

 

Less regulation is another notable issue associated with private lenders. Unlike traditional banks, which operate under strict federal guidelines, private lenders often follow their own rules. This can result in loan terms that are less favorable and may lack transparency. Borrowers might face unexpected fees or unfavorable conditions that don’t exist in more regulated environments.

 

Below is a summary table that compares the benefits and disadvantages of [private money lending](https://www.offermarket.us/blog/loan-from-private-money-lenders) based on the provided key points:

 

<div style="display: grid; grid-template-columns: repeat(1, minmax(0, 1fr)); overflow: auto; white-space: nowrap;">
<table><thead>
 <tr>
 <th>Advantages of Private Lenders</th>
 <th>Disadvantages of Private Lenders</th>
 </tr></thead>
<tbody>
 <tr>
 <td>Faster Approval Process - Approvals can be completed in days or even hours, providing quick access to funds for urgent needs.</td>
 <td>Higher Interest Rates - Loans may carry significantly higher rates (often between 8% and 15% or more), increasing total repayment costs.</td>
 </tr>
 <tr>
 <td>Flexible Terms and Conditions - Loan amounts, repayment schedules, and interest rates can be tailored to the borrower’s specific needs.</td>
 <td>Less Regulation - Operating with fewer federal guidelines, private lenders may offer less transparent terms and unexpected fees.</td>
 </tr>
</tbody>
</table>
</div>

 

![Private money lender pro and cons](https://cms.offermarket.us/uploads/Private_Money_Lenders_Pros_and_Cons_bc6d4eebf7.jpg)

 

## **Choosing the Right Private Lender**

 

Choosing the right private lender is crucial for meeting financial needs effectively. Borrowers must evaluate specific factors before making a decision.

 

### **Factors to Consider**

 

* **Interest Rates:** Compare rates from various private lenders. Rates typically range from 8% to 15%. Finding a competitive rate reduces overall repayment amounts. 
* **Loan Terms:** Review the terms offered by each lender. Understand repayment periods, penalties for late payments, and any potential fees. Flexible terms may offer better alignment with personal or business plans. 
* **Approval Speed:** Investigate how quickly lenders process applications. Some may provide funds within days, while others take longer. Quick approval benefits borrowers with urgent financial needs. 
* **Lender Reputation:** Research the lender’s reputation. Look for [reviews](https://www.offermarket.us/blog/dscr-loan-reviews) and ratings from previous borrowers. A strong reputation often indicates reliability and customer satisfaction. 
* **Transparency:** Ensure the lender provides clear information about their processes and fees. Transparency helps avoid unexpected charges and unfavorable conditions.

 

### **Questions to Ask**

 

* **What are the interest rates?** Knowing the specific rates is essential for calculating total costs. 
* **What terms do you offer?** Understanding the specific repayment options available helps in planning. 
* **How long does approval take?** Clarifying the timeline for receiving funds supports better financial planning. 
* **Are there any hidden fees?** Asking about additional charges upfront prevents surprises later. 
* **Can I see customer reviews?** Requesting testimonials gives insight into other borrowers' experiences.

 

## **Case Studies in Private Lending**

 

Examining real-world examples can provide valuable insights into how private [lending](https://www.offermarket.us/blog/dscr-lending) works in practice. Below are a few case studies that illustrate different scenarios in which private lenders have played a pivotal role.

 

### **Case Study 1: Real Estate Investment**

 

A small group of investors needed quick capital to purchase a promising real estate property. Traditional banks required extensive documentation and a lengthy approval process, which risked losing the opportunity. Instead, they turned to a [hard money lender](https://www.offermarket.us/blog/hard-money-lender) who provided a short-term loan with a higher interest rate. 

 

Although the rate was above average, the speed of approval allowed the investors to secure the property before competitors could act. Later, after securing additional funding through conventional means, they repaid the loan and went on to generate significant returns from their investment.

 

### **Case Study 2: Business Expansion**

 

A growing business encountered a sudden market opportunity that required additional capital for expansion. Unable to wait for a traditional bank’s slower approval process, the business owner approached a private equity firm. The firm provided a medium-term loan under conditions that were tailored to the business’s growth projections. 

 

While the interest rate was moderately higher than standard bank loans, the customized repayment schedule and the firm’s willingness to adjust terms during the expansion phase proved beneficial. This enabled the business to scale operations quickly and efficiently.

 

### **Case Study 3: Personal Emergency Loan**

 

An individual faced an unexpected financial emergency and needed funds immediately. Traditional banks could not process the application in time, so the individual opted for a peer-to-peer lending platform. The platform connected the borrower with multiple individual investors who collectively provided the necessary funds at competitive rates. 

 

Despite the varied sources of funding, the platform ensured a streamlined process and clear communication regarding [repayment terms](https://www.offermarket.us/blog/dscr-loan-terms#:~:text=What%20are%20typical%20DSCR%20loan%20repayment%20terms%3F), which allowed the borrower to manage the emergency without long-term financial strain.

 

These examples highlight the diverse applications of private lending and illustrate that while higher interest rates and potential risks exist, the benefits of speed and flexibility can be critical in time-sensitive situations.

 

## **Practical Tips for Borrowers**

 

When considering a private loan, it is important for borrowers to approach the process with care and preparation. The following tips provide practical guidance to help borrowers make well-informed decisions:

 

### **1\. Assess Your Financial Situation**

 

Before [applying for any loan](https://www.offermarket.us/blog/apply-for-dscr-loan), take the time to evaluate your current financial position. Consider your income, expenses, and any existing debts. A clear understanding of your financial health will help determine the loan amount you can reasonably repay without overextending yourself.

 

### **2\. Compare Multiple Lenders**

 

Do not rely on a single lender’s offer. Reach out to multiple private lenders to compare interest rates, repayment terms, and fees. This comparative [analysis](https://www.offermarket.us/blog/debt-service-coverage-ratio-analysis) can reveal more favorable conditions and help you choose a lender who aligns with your financial needs.

 

### **3\. Read the Fine Print**

 

Carefully review all loan documents and agreements. Pay close attention to any clauses regarding penalties, fees, and repayment conditions. If any part of the agreement is unclear, ask for clarification before signing.

 

### **4\. Prepare Documentation**

 

Even though private lenders typically require less documentation than traditional banks, having thorough records of your income, [credit history](https://www.offermarket.us/blog/dscr-loan-credit-score), and any relevant financial details can help speed up the approval process. Organized documentation also demonstrates financial responsibility, which can lead to better loan terms.

 

### **5\. Seek Professional Advice**

 

Consulting with a financial advisor or legal expert can provide additional insights into the [terms of the loan](https://www.offermarket.us/blog/dscr-loan-terms). Professional advice is particularly important if the loan terms are complex or if you have any doubts regarding the agreement.

 

### **6\. Maintain Open Communication**

 

Throughout the borrowing process, maintain clear and open communication with your lender. Address any questions or concerns promptly to ensure that both parties have a mutual understanding of the terms and conditions.

 

By following these practical tips, borrowers can minimize risks and make decisions that align with their long-term financial goals.

 

## **Regulatory Environment and Future Outlook**

 

The regulatory landscape for private lending differs significantly from that of traditional banks. While private lenders benefit from fewer restrictions, this environment also presents unique challenges for both lenders and borrowers.

 

### **Current Regulatory Environment**

 

Private lending is not subject to the same stringent regulations as traditional banking. This lack of regulation can lead to increased flexibility but may also result in less protection for borrowers. It is important for borrowers to carefully review the terms offered by private lenders and to be aware of any potential legal or financial pitfalls.

 

### **Emerging Trends**

 

In recent years, technology has played an increasing role in private lending. Online platforms have made it easier for borrowers to connect with multiple lenders, and the rise of peer-to-peer lending has expanded access to funds. As digital solutions continue to advance, borrowers can expect even greater efficiency and transparency in the application process. However, this shift also requires borrowers to be vigilant about cybersecurity and data privacy.

 

### **Future Outlook**

 

The future of private lending appears robust, with continued demand for faster, more flexible financing options. As the economic landscape evolves, private lenders are likely to refine their processes and offer even more competitive terms. Regulatory bodies may also increase oversight, which could enhance consumer protection without significantly impeding the agility of private lending practices.

 

In the coming years, borrowers can anticipate a market where technology and improved regulatory frameworks work in tandem to create a more balanced environment. This evolution may lead to increased trust in private [lending](https://www.offermarket.us/blog/fast-lending) options, offering a reliable alternative for individuals and businesses alike.

 

[![Need a PRivate loan, instant quote, takes 1 minute, no credit pull, no obligation](https://cms.offermarket.us/uploads/Need_a_Private_Loan_1_9f17de19f9.jpg)](https://www.offermarket.us/loans?ref=tjcontent)

 

## **Conclusion**

 

Private lenders play a crucial role in providing flexible financing solutions that cater to diverse needs. Their ability to offer quicker approvals and adaptable terms makes them an attractive option for those facing challenges with traditional banks.

 

However, borrowers must remain vigilant and informed when navigating this lending landscape. By carefully evaluating potential lenders and understanding the associated risks, individuals can secure loans that align with their financial goals.

 

With the right approach and knowledge, private lending can serve as a valuable resource in achieving financial objectives.

 

## **Frequently Asked Questions**

 

### **What are private lenders?**

Private lenders are individuals or organizations that provide loans outside the traditional banking system. They focus on personal loans, real estate financing, and business loans, offering alternatives for those who may struggle to secure financing from banks.

 

### **What are the advantages of using private lenders?**

Private lenders offer faster approval processes, often providing funding within days or even hours. They also provide flexible terms, allowing borrowers to adjust loan amounts and repayment schedules based on their needs, making them a viable option for urgent financial situations.

 

### **What are the disadvantages of private lenders?**

Private lenders typically charge higher interest rates—ranging from 8% to 15% or more—which can lead to larger total repayments. They are also less regulated than traditional banks, resulting in potential issues with unfavorable loan terms and a lack of transparency.

 

### **How do I choose the right private lender?**

To choose the right private lender, compare interest rates, review loan terms, assess approval speeds, and check the lender’s reputation. It’s also essential to ensure transparency regarding fees and to ask questions about interest rates, hidden charges, and customer reviews.

 

### **When should I consider a private lender?**

Consider a private lender when you need quick financing, have difficulty obtaining loans from traditional banks, or seek flexible terms for specific projects like real estate investments or personal expenses. However, make sure to weigh the costs and risks involved.

 

## **DSCR Loan Quote**

 

![DSCR loan quote](https://cms.offermarket.us/uploads/DSCR_loan_quote_c3ae268aed.jpg)

 

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A comprehensive review of private lenders, covering benefits, risks, types, and guidelines to help borrowers make informed financial decisions.

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Private Lender Insights: Benefits & Risks

The Benefits and Risks of Working with Private Lenders

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Private Lending | OfferMarket

Private Lending

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