Residential vs Commercial Hard Money Loans

paperfree Aditi Bansal

Updated on Dienstag, 2. Mai 2017

Many people are wondering what the difference between residential and commercial hard money loans is? A commercial hard money loan is a special type of hard money loans designed for real estate investors. The commercial hard money loans are used to acquire and renovate a property.

tags  #Commercial hard money loans  #Residential vs Commercial #


Real estate investors sell or rent out their properties after buying and fixing them up. This may seem like a great way to make a lot of money. However, it can be very capital demanding. In other terms, this means that a lot of money will be used to run and invest in real estate business. In this case, you may not get money when you need it, especially if it has been tied up somewhere for a while.

The difference between residential and commercial hard money lenders:

To make matters worse, many investors think that they can grow fast using their capital. The truth about your money being tied up is that you won’t grow. You will need more funds to grow your business. This is the main reason that many investors are opting for commercial hard money loans as their main source of capital. You may be in a situation where you want to decide which type of loan to take and which will be the best choice for you. This will depend on different situations. The main difference between a commercial hard money lender and a residential hard money lender is the type of property that can be approved for your commercial hard money loans.

Overall Rule of Thumb that will Help you in Choosing the Right Money Lender:

Your choice of hard money loans will depend on the end-user property. If the building will be used by people to work there, then you will need a commercial hard money loan. On the other hand, if there are people who will be living on the property, then you will need a residential hard money loan. It then comes down to the size of the construction. If the structure is small, you may need a small loan. If the property will be a big structure, for instance, an apartment building or condo, then it will be commercial hard money loans.

Whether you need a residential or commercial hard money loan will also depend on whether it is a small rehabilitation on an already existing property or a new development/ and what will be the end use of that property.

Commercial hard money loans are mainly used for buying or rehabilitating an income-producing property. Speed and flexibility are some of the many benefits of commercial hard money loans. However, the question of whether you need commercial hard money loans or residential loans will depend on several factors. It is recommended that you contact a good hard money lender and tell them about your project and you will get assistance in choosing the best.

This page has a focus on Commercial hard money loans, Residential vs Commercial was shared by Aditi Bansal.

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