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San Joaquin County Hard Money Lenders
A hard money loan can mean the difference between you funding your real estate investment dreams and you having to miss out on them. A hard money loan is a short-term real estate loan that people use to fund real estate purchases. They’re favored by real estate investors looking for money that will help them compete in the real estate market.
If you’re planning on getting a hard money loan, you should know the pros and cons so that you can make the best decisions for your circumstances.
Pros of Hard Money Loans
There are many reasons that getting a hard money loan would make sense to borrowers.
Money is Delivered Quickly
The turnaround time between the time you get approved and the time you get cash in hand is extremely quick. Most borrowers will have their cash in under a week, and some will get theirs even sooner. This quick turnaround time makes it possible for investors to respond quickly to fast-moving real estate transactions like bidding wars and hot properties that have poppped oup on the market. Traditional loans take anywhere from 30 to 45 days to be approved, and most traditional lenders make it really difficult to get loans to purchase real estate investment properties.
Your Credit Rating is Secondary
A hard money lender will look at your credit rating to get an idea of how you make payments, but the primary factor that will be considered when making a loan determination will be the value of the collateral you bring to the table. Hard money lenders lend money to people who have the collateral to back up the loan. That collateral could be a property you already own or the property you’re planning on purchasing. In the case of hard money loans, it’s usually the latter.
The Terms of the Loan May Be Flexible
Hard money loans are made by individuals and investors instead of banks. This means that a lot of the set-in-stone terms that you’d encounter with a traditional bank are for the most part absent here. Hard money lenders definitely have their rules, but they may be able to be more flexible with the terms of the loan. Speak with the lender that you’re interested in, and see what they have to offer.
Cons of Hard Money Loans
The following issues are things you need to think about before you move forward with a hard money loan.
The Interests Rates Are High
The interest rates for hard money loans are higher than the ones that you’d get with a traditional lender. The reason that they’re higher is because short-term real estate investment loans are riskier, and the hard money lender is taking on that risk. Pay attention to the interest rates, especially if you’re not making any payments until the loan comes due at the end of the loan term. Interest can tack on many thousands of dollars to a loan.
There’s One Giant Balloon Payment at the End of the Loan Term
Hard money lenders are paid back at the end of the loan term, a period which can last anywhere from six months to three years. The thinking is that your investment property will sell, and the lender will be paid. This is great if the property sells. If the property doesn’t sell, you’ll have to refinance the loan, a contingency plan that you’ll have to account for ahead of time. If you don’t have a back-up plan in place when the loan comes due, the lender could foreclose on your property. Make absolute sure you have a plan in place for a worst case scenario.
The Industry Has Little Federal Oversight
The days when the industry was overrun with predator hard money lenders has passed, with most people having a good experience with lenders today. In spite of this progress, it’s still possible to be taken in by an unscrupulous lender if you don’t do your homework.
Take the stress out of purchasing investment properties by getting top notch assistance from our team of professionals. If you are considering the option to use hard money loan, we can help.
Real estate investing is a highly lucrative field and numerous people enter this industry to create vast fortunes and achieve financial independence. In order to become successful in his lucrative industry you need to educate yourself and have access to the right team or resources.
In real estate investing, having access to reliable sources of financing or loans is absolutely essential for success. When a deal pops up, you need to be able to take advantage of it right away and not waste valuable time.
When time is of the essence it’s imperative to take action immediately and get things done fast. Fast-moving deals demand fast action on your part, meaning you need to be able to fund your purchase quickly.
Hard money loans are available and are a great way to close deals quickly, before the competition does. Waiting several weeks or months for a bank loan is not the best strategy for a serious investor. Numerous investors have used hard money loans to fund their real estate investments and grow their business.
Understanding Hard Money Loans
The first step to utilizing hard money financing is to understand how it works and how it can help you grow your business. When exploring real estate investment funding, you need to have a good understanding of a number of ways to accomplish your objective. It is also important to understand the costs involved and how to find a reliable lender to work with.
Finding hard money sources or lenders is not difficult but finding reliable and experienced lenders requires proper research. And there are professionals who can help with that – to advise and guide you in selecting the right lender for your project.
The key is finding which hard money lender or loan is a good fit for your real estate investment project. And that’s where we come in – to give you access to our conglomerate pool of hard money lenders who is eager to meet your needs.
The Advantages Of Using Hard Money Loan To Purchase A Property
Obtaining financing with a hard money loan offers investors a number of benefits, including:
Fast Funding: Hard money loans are a great option for investors who need to close a deal quickly. Hard money lending is fast, as you can obtain a loan within a week. Time is of the essence when you are dealing with large investment projects, and hard money loan can help make that process quicker.
Collateral: When dealing with a hard money lender, the property itself is used as collateral for the loan. You’ll find that some lenders even consider other assets during the loan process.
No Credit Needed: Hard money lenders do not care about the credit history or credit score of the borrower. Thy use the value of a property as a determining factor for the loan, not your credit worthiness.
Flexibility: Loan terms can be negotiated when working with a hard money lender. Banks and other conventional lenders do not offer such flexibility.
Let Us Help You Get Funding Fast
We have been providing excellence service to real estate investors and we have what it takes to advise and guide you properly. Our team of hard money pool is available and is a great option for anyone who is serious about taking their business to the next level.
We have a great reputation in the industry and we’ll ensure that you are completely satisfied with out service. Contact us right away to get started on your way to real estate investing success.