We help real estate investors get hard money/private money loans for their next project. Money and finances should never be the obstacle that stops you from succeeding. We regularly help entrepreneurs, real estate investors, and businesses of all sizes challenge the status quo. We take risks on the go-getters, and do’ers – who have an opportunity and need a partner.
At Delancey Street, we invest in people and their ideas – not abstract concepts like credit scores, or other financial metrics. Tell us about your idea, let’s discuss your opportunity – and how we can help you capitalize on it. For years, our team members have been helping people capitalize on opportunities using hard money loans, private loans, reverse mergers, other financial vehicles.
We fund loans up to 80-90% LTV. We look at the value of your property, and your overall business plan when deciding whether to fund you.
We realize deals can disappear if you don't have fast funding. We promise to treat you like a partner, and work fast to help you get funding.
We're a growth focused private money lender. That means we work fast to fund your deal, and there's no limits on what we can do for you.
Residential refinance in Los Angeles, with a loan amount of $830k, at 75% LTV. We were able to help the investor get a loan at 8.99% with a balloon payment after 18 months.
Delancey Street funded a new residential purchase in California, for $1.2 million with 82% LTV. We helped the developer with a loan at 11% with a balloon payment in 9 months.
On the other hand, we denounce with righteous indignation and dislike men who are so beguiled and demoralized by the charms of pleasure of the moment, so blinded by desire.
Savvy real estate investors often consider a full range of opportunities in order to maximize their return on their investments. In some cases, the best real estate opportunities are found in buying an income-producing property that is in great condition and simply pulling cash flow from it on a monthly basis. Bank loans are a great way to finance this type of real estate investment because they usually have a long term, a low interest rate and an affordable monthly payment. However, there are also other types of real estate investments that could be just as profitable or even more profitable in some cases. A major hurdle that needs to be jumped for many of these alternative investment options relates to financing. What can you do when you need to finance a real estate project that does not qualify for bank financing? The answer may be found in hard money.
How Banks Make Real Estate Loans
You may be fairly familiar with the real estate loan process from banks through your previous loan applications. However, you may not understand why the specific loan process is in place or why so much documentation is required. When your bank loan closes, the bank usually initially funds the loan with its own money. However, most banks do not retain real estate loans. Instead, they sell them in pools. In order to sell their loans, the loans must all meet very specific criteria. For example, the applicants must have a minimum credit score and a maximum debt-to-income ratio. Essentially, banks set their underwriting requirements so that the loans can be sold. They do not have any flexibility to think outside the box even if a loan request makes excellent financial sense. If one small factor does not fall into place with a loan application, the loan request will typically be turned down. Hard money loans, however, have a completely different process.
What to Expect From Hard Money Loans
The primary differences between hard money and bank loans lies in where the money is actually coming from. Private investors or private companies make hard money loans with their own funds. Essentially, they are looking at these loans as an investment of their own by drawing interest charges off of your monthly payments. They have no intention of selling the loans as banks do. In most cases, private money or hard money lenders are concerned mostly about the property value. They want to ensure that sufficient value is in the property to cover the loan in the event that you default. This mentality results in hard money lenders being able to approve loan applications that banks may not consider. It also usually results in short loan terms, balloon payments and higher interest rates.
When to Use Hard Money
You may be wondering what types of projects hard money loans are used for. While hard money lenders may entertain a wide range of scenarios because of their flexibility and lack of underwriting constraints, there are a few specific types of scenarios that are more commonly used. For example, renovation projects are commonly financed with hard money. The borrower may plan to sell the property after renovations are completed for a large profit, so a short-term, interest-only loan with a fast and easy underwriting process may be ideal. Because hard money loans have a very short processing time, they may be used when a fast closing is necessary as well.
Many people compare hard money loans against bank loans, and they view hard money loans negatively because of the specific loan terms offered by hard money lenders. However, bank loans are only available for very specific types of scenarios, and their loan terms may therefore not be suitable for the specific project that you are working on. It is not feasible to compare hard money loan terms against loan terms that cannot even be considered for the scenario. With this in mind, now may be a great time to reach out to a few reputable hard money lenders to explore your financing options.
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