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Hard Money Loans Nashville
The titans of real estate share a number of traits amongst themselves. They are clever individuals with a strong sense of personal responsibility and a great ability to find a bargain. They also often share a means to obtain the money they require the purchase the real estate they desire in the first place. Their secret is something known as a hard money loan.
What Is A Hard Money Loan?
Some real estate investors have a number of properties in their portfolio at the same time. They are juggling all of those various payments and expenses, and this can tie up their funds in a big way. It may be difficult for such an investor to get a traditional mortgage loan from a bank. The bank may deem them to be too big of a risk to lend the money. However, there is another option.
Hard money loans are a form of lending that involves putting down an actual asset as collateral for a loan. In other words, the borrower is putting something at stake rather than asking the lender to simply take their word and their credit score as proof of their likelihood of repayment.
Length Of Loans And Their Usefulness
A hard money loan is a short-term loan that typically ranges between six and twenty-four months. The purpose of such a loan is not to purchase a house to live in, but rather to purchase a house that can be remodeled or otherwise upgraded to resell.
You may have heard of people who “flip” houses for a living. What they are doing is using a hard money loan to obtain the property that they need in order to upgrade it and then sell it on to the next person for a profit. Those who are skilled at doing this can turn a tidy profit for themselves in as little as a few months with hard work.
Never Slowing Down Progress
Real estate investors know that some of the very best deals in real estate do not stay on the market for very long. If they do not act quickly to snatch up those deals someone else will. It is nice to know that it is not necessary to have one-hundred percent of the capital that you need ready to go to purchase properties if you use hard money loans.
Most individuals do not walk around with huge sums of money that they can throw around to purchase properties outright to upgrade them. Those who do have that kind of money are not looking for loans in the first place. For everyone else there is the option to borrow a hard money loan to simply make the upgrades necessary and then flip the house for a profit.
Why This Can Work In Nashville
It is pretty clear that this hard money loan borrowing strategy would not necessarily work in every single real estate market in the country. Only certain markets even have the capacity to allow a real estate flipper to make his or her money doing these kinds of deals. Fortunately, Nashville is one of those markets.
Nashville has transformed itself in recent years into a technology and healthcare friendly city. A lot of jobs have entered the area, and so have a lot of educated people. The city is host to Vanderbilt University and is just a thirty minute drive away from Middle Tennessee State University. As such, there are a lot of people pushing up demand for new housing in the area.
Real estate investors have begun to lick their lips at the possibilities that exist for them to make money in Nashville. The hard money lending industry is definitely getting excited about the possibilities that exist their as well. It is pretty clear at this point that both investors and lenders can stand to make a pretty nice profit off of the opportunities that abound from this particular region of the country.
Hard money borrowing may be the best way for any individual to put their stake in the ground and claim their little corner of the real estate market in an area that is certain up and coming.