You want to invest in real estate but where do you start? You’re looking for funds but you’re not sure where you’ll get it. A Hard Money loan may be your answer.
What is a hard money loan?
Hard money loans are short-term lending tool that real estate investors can use to finance an investment project. Hard money loans are issued through private money lenders rather than banks. It’s a loan generally used by professional real estate investors. If you’re looking to get into the real estate game, you’re going to want to understand hard money loans.
Hard money loans are often used for house-flipping in which the investor buys a house, fixes it up, then resells it for a profit. This is the sort of loan you’ll need if you don’t want your creditworthiness to be an issue. Hard money lenders use the value of the property itself to determine whether or not make the loan. They will also look at the after-value repair which is an estimate of what the property will be worth after its renovated.
What are the pros of hard money loans?
First of all, they’re fast. With a hard money loan, it’s easy to get funding in just a few weeks instead of waiting long periods of time for a mortgage. If you’re funding a time-sensitive project, you will need a loan that will work within your schedule.
Second, they’re flexible. Since these loans are made by private money lenders, there is room for negotiation. You can talk to an investment specialist to determine the terms of the loan.
Third, getting funding is easier. The lender will lend as much as the property is worth because the property’s value is what they care about. If you have negative items in your credit report, it’s much less likely to hurt chances of getting a loan. Hard money lender is able to provide loans in situations a bank would not even consider.
Contact the specialists at HML Investments today for more information about hard money loans.