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Hard Money Loans Bakersfield
Bakersfield Hard Money Lenders
Delancey Street is a premier and top rated hard money lender in Bakersfield. Our team has handled millions and millions in funding on behalf of real estate investors. If you need a hard money loan for your next residential or investment property – then we can help. We fund hard money loans up to LTV’s of 70-80%, and are comfortable working with both residential and commercial projects.
If you’re buying real estate, you may have heard of hard money loans. It is a topic that is widely discussed within the investment sector, and it is not always understood. Hard money lenders, commonly referred to as HLMs, are usually either private investors or small investment firms or groups who lend money based on the property type you are buying; credit scores are not a considered factor to this type of lending. The property itself is the protection against default by the borrower. Here are some of the common pros and cons of hard money loans.
Pros of Bakersfield hard money loans
Developers and house flippers frequently utilize hard money loans to fund deals because they can often borrow the full amount of the purchase price of the home or property. If you are able to purchase a property and flip it quickly for a huge profit, a Bakersfield hard money loan may be a desirable option. Some real estate investors will use hard money to acquire the property, then they do some major renovations to increase the home’s value. Many of these investors will then acquire a loan from a traditional bank, based on the home’s increased value, and then pay back the hard loan with the bank loan.
Hard money loans are also a great option for those with poor credit or anyone needing to get into a home quickly. You do not have to jump through hoops or cut through a lot of red tape to get the funds you need. In many cases, you can acquire a hard money loan in a matter of days; it can take a month or longer to acquire funds with traditional lenders. Once you pay the origination fees, you can easily acquire a hard money loan without a property appraisal in many cases.
Another advantage of a hard money loan is that you typically do not have to deal with the banks, an underwriting team, processors or loan committees. Since most Bakersfield hard money lenders are individuals or very small groups, the process of acquiring a loan is very fast and straightforward. In some cases, you will need to have additional assets to back up your loan.
Cons of Bakersfield hard money loans
Bakersfield hard money loans are very expensive. The interest rates are astronomical, and many rates and fees are even higher than those of the subprime lending market. You can expect to pay at least double the national average, in terms of costs and fees, for a hard money loan.
There are often a lot of hidden fees when it comes to a hard money loan. Lenders have to include additional clauses and add on more up-front fees to protect themselves from default with these risky loans. Due to the high interest rates and large number of up-front and recurring fees, hard money loans are best suited for professional house flippers and property rehab teams. If you have bad credit and need a hard money loan to get into a home quickly, these loans can be good for the initial purchase. Hard money loans a fantastic way of getting access to capital fast. Many lenders use hard money loans for fix and flip projects. As a real estate developer, a hard money loan is a great way to rapidly expand your portfolio. Because you have access to cash, you can rapidly buy new projects without having to worry about having the cash upfront.
Bottom line: if you want to fix and flip, buy commercial real estate, or simply need extra money – a Bakersfield hard money loan is the way to go. Delancey Street – a premier Bakersfield hard money lender, can give you immediate cash. If you’re a developer, we can finance your entire venture.
Hard money loans are an excellent real estate investment tool. These loans are provided by individuals and organizations to investors looking for short-term real estate financing. They’re extremely popular with people who want to get into booming real estate markets as well as those looking to simply build an investment portfolio. It allows them away to secure financing without having to go through traditional banks, which don’t usually lend money for short-term real estate investment schemes..
If you’ve gotten to the point where you know that you’re definitely going to go for a hard money loan and you’re ready to speak to a lender, there are some questions that you should ask so that you have all the answers you need to make a fiscally responsible decision.
What exactly is a hard money loan?
A hard money loan is a short-term real estate investment loan that allows investors to quickly borrow money and finance investment properties that they’ll buy and sell for profit. These loans are for short periods of time, usually lasting anywhere from six months to three years. After the loan period is up, the idea is that the borrower will sell the property and repay the loan.
Questions to Ask Your Hard Money Lender
Do you lend money to people looking to by owner-occupied properties?
This question would be for people who are hoping to use a hard money loan to purchase an owner-occupied residence that they will be living in themselves. Hard money lenders usually don’t like to be involved with lending to individuals. The issue here is that if they do, they’ll have to follow tighter government rules and apply stricter lending criteria in order to get the borrowers approved.
This is as a result of the Dodd Frank Act that was put into effect in 2010 to make sure that banks applied strict lending criteria to consumer borrowers to ensure that they were financially qualified to handle the loans that were extended to them. Hard money lenders don’t like to work with these types of loans because they requires extra paperwork, rules and oversight.
How do you expect the loan to be repaid?
Some hard money lenders don’t expect any month-to-month payments from their borrowers during the length of the loan. Some lenders require that borrowers make interest-only payments during that period. All lenders require that the full amount due is paid at the end of the loan term via one large balloon payment that will ostensibly be funded via the sale of the property. Find out exactly how the lender that you’re interested in has its borrowers pay back their loans.
What experience do you have with hard money loans?
This is a very important question to ask, especially if you are a newbie when it comes to hard money loans. You want to make sure that the hard money lender that you choose has a lot of experience with the type of property that you’re buying so that they can guide you through the process and alert you to any pitfalls that you may not be aware of. You also want to choose a lender based on their specialty. This means that if you’re going for a land hard money loan, you’re going to want a lender that has experience working with land hard money loans.
What are the fees and what is the interest rate on the loan?
The principal of the loan is the bulk of the loan, but the interest and fees will also really add up. Interest rates for hard money loans are high, often reaching 15% or higher due to the risk associated with this type of real estate. Find out from your lender exactly how much interest you will be expected to pay. You’ll also want to find out what fees you’ll be responsible for. Many lenders include fees like origination fees and early prepayment penalty fees.