“By nature, private lending tends to be a lot more flexible than conventional lenders, who are often subjected to multiple layers of regulations and may not be familiar with a specific market segment,” Freid tells GlobeSt.com. “In our case, our loans are funded by a handful of family offices that we have worked with for many years.”

Freid noted these “private lenders” come up with creative solutions that address unique circumstances. For example, he says, some of his clients meet many of the requirements set by a conventional lender but, because they come short of meeting all the requirements, can't obtain a loan.

“Private lenders have their own informed view of the market risks and how they want to deal with those risks,” Freid says. “We are not a fund so we are not under pressure to put money out. We personally review each transaction, can commit on the same day the transaction is submitted and can close within a week. Conventional lenders can't do that.”

MIAMI—As the real estate cycle evolves, lending is becoming tighter. Securing construction loans and mortgages are taking longer as conventional lenders are increasingly cautious about the South Florida real estate market.

The Urban Institute Housing Finance Policy Center published a research note recently that sheds more light on the situation. The report cited date from the Home Mortgage Disclosure Act, revealing lower-credit applicants accounted for only 33% of all applicants in 2015. That compares to 62% in 2006, at the height of the bubble, and 50% in 2000, when market conditions were generally considered balanced.

Against this backdrop, private lenders are becoming more active in the region, helping fill the void left by some traditional lenders. GlobeSt.com sat down with Jim Fried, president of Sandstone Realty Advisors in Miami, to discuss the role of private lending in today's real estate market.

Here's the big question: Will more flexible private lending now become available compared to traditional banks?

“By nature, private lending tends to be a lot more flexible than conventional lenders, who are often subjected to multiple layers of regulations and may not be familiar with a specific market segment,” Freid tells GlobeSt.com. “In our case, our loans are funded by a handful of family offices that we have worked with for many years.”

Freid noted these “private lenders” come up with creative solutions that address unique circumstances. For example, he says, some of his clients meet many of the requirements set by a conventional lender but, because they come short of meeting all the requirements, can't obtain a loan.

“Private lenders have their own informed view of the market risks and how they want to deal with those risks,” Freid says. “We are not a fund so we are not under pressure to put money out. We personally review each transaction, can commit on the same day the transaction is submitted and can close within a week. Conventional lenders can't do that.”