Delancey Street is a premier, and top-rated, Wyoming hard money lender. We understand the complexities associated with real estate investment properties, and getting the funding you need to take ownership of the property. We can help you. Regardless of whether you have a residential, or commercial, property in mind – we’re here to assist.
The value of a property differs greatly from one place in the country to the next. Comparing two homes one from California and another from Pennsylvania, for example, will not do you a lot of good. You have to try to figure out what a piece of property is worth simply by comparing it to others in the area that are of a similar size. These are called comps in the business, and it’s one of the things we look at when evaluating potential investment properties. It’s how we’re able to move fast, and give you an answer fast – even without looking at your property.
Assuming that you have already been rejected by traditional lenders, you may have few options left. Typically, hard money lenders liek Delancey Street provide funding for real estate investment properties. Many traditional lenders will refuse to do so, especially after the 2008 crash – which restricted their ability to provide funding on investment properties.
How is a hard money lender different from a traditional lender
The most important difference between traditional lenders and hard money lenders is the fact that hard money lenders are asset-centric lenders. They focus on the asset associated with the funding request. But, in contrast, traditional lenders are fixated on the borrowers credit and how much money the real estate investor has. It’s critical to remember hard money loans are not great for the long term. The purpose of a hard money loan is to be a bridge loan that gets you the home you’re attempting to purchase. Hard money lenders focus on short-term loans that generate a great ROI for the lender and borrower. If you fail to repay the loan, then the hard money lender can repossess your property to settle his/her loan.
Why shouldn’t you get a hard money loan?
There’s some really important reasons reasons why a hard money loan is a bad idea. For instance, hard money lenders charge higher interest rates. This is because hard money lenders think they’re taking substantial risks by lending on an investment property – and wish to be reimbursed accordingly. High interest rates make hard money loans unaffordable for some kinds of deals. In addition, hard money lenders have shorter terms than traditional lenders – which also makes them unattractive. Traditional lender offer 30 year periods but private money lenders offer only 1-3 year terms.
Hard money lenders can help finance your next loan
Hard money lenders serve a very specific group of individuals, i.e. real estate investors. Hard money lending is a type of short-term financing, which is secured by the property. Specifically, the people who use hard money loans are typically real estate investors – typically, those who are being denied a traditional loan as a result of stringent guidelines.
Hard money lenders exist because they are fast, and offer loans with little to no headaches. Hard money lenders have a smooth application system. They anticipate collateral and don’t look at your credit score. They concentrate on your experience, as opposed to your credit score. In case you have a bad financial history, it’ll be easier to obtain financing with a hard money loan as opposed to a conventional loan that’s granted based on your credit report. Below are scenarios where hard money lenders fill a void that traditional lenders do not touch:
Wyoming Hard money loans can be used for repair and flip property investors
Most traditional lenders won’t offer you a loan for a fix and flip project. Traditional lenders aren’t allowed to lend on investment properties or properties in bad condition. If the house is in bad condition, or there’s some other abnormality with the house, then a traditional lender won’t give you funding. Additionally, most fix and flip potential deals”go fast.” The owner of the property wants to sell the property as fast as possible and will accept the first deal. Traditional lenders spend an immense amount of time doing due diligence. It’s because they have numerous guidelines in place that are designed to reduce their exposure financially. By the time the loan is approved – you’ve already lost the property because someone paid money for it. For those who have a hard money lender on your side who will close a loan in 5-10 days, you can find the fix and flip property.
Hard money loans are short-term bridge loans
From time to time, your project may over-budget and consequently force you to seek additional funding. Some conventional lenders will refuse, because the job isn’t finished. While this can be devastating, a hard money lender might be willing to lend you the funds. Hard money lenders are delighted to provide money to bridge the gap in funding, and can work with you to fill that void.
Hard money gives you bargaining power
If you’re a real estate investor, greater access to capital means more potential simultaneous deals. By using hard money, you can work on more simultaneous deals that would otherwise be impossible since you don’t have the capital to fund them. Traditional lenders consider your overall debt to income ratio, and will not give you funding if they believe you owe too much money on existing properties. In contrast, a hard money lender doesn’t care about your income, nor do they care about your present debt. The one thing a hard money lender will care about is the value of your property. Keep in mind, traditional lenders aren’t interested in taking on additional risks – they legally aren’t allowed to after the 2008 crash. Hard money loans typically finalize faster than conventional loans from a bank, which permits you to move quicker. Many sellers will be flexible on their cost and willing to cut you some slack – if you can show buy the property ASAP. Many property investors that rely on traditional lenders cannot move fast because of delays because of the strict guidelines conventional lenders have.