Investment Information: Commercial Hard Money Loan Advantages
There are many commercial hard money loan advantages. They’re fast, easy, and accessible. Here’s what you should know about commercial hard money loans.
Fast approval and funding
Constructions loan are short term interim loans for financing the cost of construction. The lender advances funds to the builder as the work progresses. They are either obtained by the home-builder or prospective owner. Many contractors use hard money loans to buy a lot, build on it, then sell the new structure and pay off the loan quickly.
Most Hard Money Lenders can fund in a matter of days after receiving all the necessary documentation, while traditional lenders can take months. Applying for a hard money loan is a very simple process compared to traditional loans which is known for being a long and strenuous process. Once the real estate investor has been approved for the loan, they will receive the money in a matter of days. When it comes to investments, time is money.
Even with a great investment opportunity and solid business plan, you can still leave a bank empty handed due to their strict regulations when it comes to credit scores. Commercial hard money loans have fewer requirements and less regulation compared to bank loans. The aspect of the investment that matters to the hard money lender is the value of the property. This is because the property serves as collateral.
Don’t deal with traditional lenders
In the case of house-flipping, there are many traditional lenders who will not approve the loan. Because a fix and flip investment is generally short-term, hard money loans are perfect for this kind of investment. A good fix and flip investment should not take more than a year and conventional lenders to do not offer such short-term loans.