Are you a real estate investor? Hard money loans are tailor-made for real estate investors. These are not the type of loans you get from traditional banks. There are investors and alternative lenders who specialize in funding real estate investors. Unlike traditional bank loans, hard money loans are very convenient to real estate investors, especially to a new investor who is starting his first investment and needs some financial back up for his project to be successful. Some opportunities come once. If you are an investor and a good opportunity shows up, don’t be held back by lack of enough funds, hard money loan will save the day. Discussed below are the reasons why many real estate investors opt for a hard money loan.
First loan approval and funding. Unlike traditional loans, with hard money loans, there are no lengthy processes required for one to qualify for a loan. You are not required to get approval from referees or have collateral to be eligible for a hard money loan. In most cases, you are only needed to fill a form, and after a few minutes, you will receive conditional approval for your loan. When you are a real estate investor, time is very crucial. Good opportunities for investment are very competitive. Taking weeks to wait for a bank loan to be approved will lead to loss of investment opportunity. You need a hard money loan that will take your business to the next level.
Another reason why real estate investors consider hard money loans is because a perfect credit score and income history are not a necessity to qualify for a hard money loan. To be eligible for a bank loan, you must present a perfect credit score and an income history which must meet the bank’s criteria; otherwise, you will not qualify for the loan. For a hard money loan, the lender will only consider the value of your investment which will act as a collateral for the loan. Once the lenders are comfortable with the valuation of the property and equity, they can give you the loan if everything is up to their satisfaction.
Also, with a hard money loan, a real estate investor has the opportunity to reinvest equity from an existing property into a new property. When an investment opportunity arises, decisions should be made in the shortest time possible. You need to have enough funds to purchase the property or have enough funds for a down payment. If you have a sufficient amount of equity with hard money lenders in their property, you will be lucky to be offered a cash-out refinance loans to fund your investment. In about a week, your cash-out refinance loan will be processed and you will be ready to proceed with your purchase.
Hard money lenders take their clients seriously and give reliable advice that will be of help to you as an investor. Before they offer you a loan, they will analyze your loan request or your project and provide you with their best and honest opinion. They are also after the interest of their clients to see that they become successful in their real estate business.