For those searching for hard money lenders, Los Angeles is one of the top places to find financing! Because of a massive population and a wide variety of property options, there was a glaring need for financing and private loans helped to fill the vacancy left by an increasing frugal banking industry. The loans have allowed thousands of interested real estate investors to get access to capital, turn that loan into substantial profits, and then continue their pursuit of acquiring more properties for their portfolio. The dynamics associated with these lenders can be tricky if you have never utilized them before. Knowing which lenders are actually who they claim to be, having the proper expectations regarding what you can get financed for, and then, of course, understanding the arrangement in terms of collateral and repayment are key components to using these financing opportunities properly!
Separating the GOOD from the BAD
Los Angeles hard money groups have been around for a while, but for many, they remain a mystery. Because real estate has long relied on the large banks and brokerages to finance private ownership, the use of these loans has continued to fly under the radar. However, due to necessity, their use rose, giving birth to an entirely new financing opportunity.
Not all of these lenders are created equally, though. The burden of research falls directly on the borrower, as there are few regulatory bodies to let you know which are telling you the truth, and which are simply in it to snatch a bit of your money before disappearing into the night. Websites, for example, can tell you quite a bit. You can learn about other properties that the group or individual has financed. A common scheme noted in the industry involves the request for up-front “fees” before approving the loan. Then, you are told that the lender will research the property to determine whether or not they are going to lend to you. Of course, you learn that they will not (after a period of time), but the “fee” is non-refundable. Essentially, you have been duped.
Understanding this dynamic can save you quite a bit of frustration!
This does not mean that Los Angeles hard money lenders are fraudulent. In fact, the above situation is a rarity – we only mention it because it exists and should always be kept in mind as you are searching for property financing.
In the search for hard money lenders, Los Angeles is a hotbed! Thousands of investors have plenty of capital and are simply waiting for the right borrower to assist. They will see a substantial return on their investment in your purchasing venture, but the borrower, when properly handling the situation, can also enjoy an incredible return. Property values are on the rise again, and those who own several pieces of property stand to enjoy the surge more than everyone else. Be sure that you are in a position to ride the next real estate wave in Southern California!