Become a Successful Real Estate Investor with Private Money Loans
Private Money loans are non institutional loans funded by private investors and are secured by real estate. They are also known as hard money loans. These loans give borrowers an easier option when it comes to financing since they are much easier to obtain than traditional loans. Traditional lenders have strict regulations when it comes to being approved for a loan and even if you have a structured investment plan, you can still leave the bank empty-handed. This is because banks look at the borrower’s credit and if they have bad or no credit, they will not be approved for the loan. Hard money loans are asset based which means that these lenders are mostly concerned with the value of the property that is serving as collateral. Private money lenders also base their decisions on the property’s marketability, the borrower’s exit strategy, and their ability to repay the loan.
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.
Most fix-and-flip loans are financed by hard money lenders. Why? Because hard money lenders lend money based on real estate—a hard money loan is just a short-term loan secured by real estate. The hard money lender looks at the property you want to invest in and they will look at your investment plan (including repair, maintenance, and closing costs) and then determine whether or not they will fund the deal.
Working with a hard money lender isn’t just about financing, it’s a partnership. The hard money lender makes money when you do so they want the project to go as smoothly as possible. The lender will work with you to come up with a loan that works best for you because the last thing the lender wants is problems that put the project in jeopardy.
Communication, integrity, and timeliness is most important. Finding an alternative lender to handle these investments doesn’t have to be difficult. Find out more about HML Investments here.