Hard Money Commercial Loans
The emergence of hard money commercial loans cannot be understated, as these lending firms are creating new opportunities in markets across the United States. By continuing to keep the capital “moving” during a historically frugal lending period in the financial sector, private secured loans are helping buyers everywhere acquire distressed properties with quickness and ease. These lenders understand the true nature of real estate, and, because these loans are for 70% of the property’s value, they are able to generate fast approvals. Anyone who has shopped for commercial real estate understands the importance of speed when attempting to secure capital!
Comparing Standard Lending and Hard Money Alternatives
When a prospective buyer is attempting to acquire a commercial property, they must immediately contact the bank, as the arduous process MUST get started as early as possible. If the buyer is lucky, the bank sends out an appraiser within a few days, getting the “ball rolling”. Once the property has been appraised, the information is sent over to the bank for “processing”. This is where things get strange – banks can (and will) take WEEKS to process a loan application. And, while they have their reasons for doing so, it doesn’t help the buyer in any way. In the time taken to process the application, capital-rich investors can swoop in, snagging the property from underneath the waiting buyer.
Now, if the same buyer had contacted a hard money lender instead, they could get approval and capital within DAYS, allowing them to purchase the property quickly. Anyone who has a real estate portfolio can tell you that timing is EVERYTHING! Getting the right location at the right price involves either having the capital to buy already in hand or leveraging private funding to purchase the location within days of viewing – this is how hard money commercial loans have changed the game!