How do I Use Hard Money Loans to Fund Real Estate Business

    by Aditi Bansal

Updated on Dienstag, 20. August 2019

The modern real estate industry has embraced hard money loans as one of the essential sources of project funding. Here are some concepts of hard money loans that will give insights on how else to finance real estate.

tags  #Commercial hard money loans  #Real estate investors #


What is a Hard Money Loan for Real Estate?

Private individuals issue hard money loans to real estate investors who want to buy real estate properties. The lender will agree to give you the money at a specified rate of return, but they must first review the kind of real estate investment you’re putting the money into. Upon receipt of the loan, you will begin to repay regular installments for an agreed duration.

Pros of Hard Money Loans for Real Estate

  • As a real estate purchaser, hard money loans can be quite beneficial to your new projects. One outstanding benefit with hard money loans is that they are processed much quicker than the traditional bank loans. When you choose to pursue this financing option, you can be sure to get your money in a few days- mostly in less than a week. Depending on the amount of loan you need, traditional banks can take several weeks or even months to complete their rigorous vetting process.
  • Another significant benefit is that you won’t have to undergo the strenuous application process. You simply fill up an application form and the individual lender will decide whether they’ll work with you or not. The traditional banks take applications through multiple approval steps which reduce your chances of qualifying for a loan.
  • Hard money lenders don’t give a damn about your credit records. Even if you have a questionable credit history, you will get loan approvals provided you can provide adequate collateral- which is usually the property you’re purchasing. That’s why hard money lenders often take interest in what kind of real estate investment you’re putting the money into and see if they’re able to recover their money in case you default. 

When to Use Hard Money Loans?

Hard money loans can be appropriate in various situations. You can, for instance, find a valuable property that you need to buy quickly due to a high speculation or return on investment it offers. That would necessitate the use of hard money loans since the lenders will be able to give you the money faster, and you won’t have to miss out on the opportunity.

In some instances, your credit scores may be wanting hence locking you out of the conventional lending institutions. Bank will turn you away if your credit score doesn’t meet their specified benchmarks. However, hard money lenders will just give you the loan provided you’re able to pay back.

This page has a focus on Commercial hard money loans, Real estate investors was shared by Aditi Bansal.

Share this on: