Everything you need to know about hard money loans

    by Aditi Bansal

Updated on Thursday, May 04, 2017

The term hard money loan is common when it comes to real estate investment. The main advantage of hard money loans is their speed and flexibility. However, there tend to be a lot of confusion concerning them.

tags  #Hard money loans  #Real Estate Investors #


What is a hard money loan?

The term hard money suggests otherwise. However, real estate investors find it fairly easy to deal with hard money lenders to fund their real estate investment. Commercial hard money loans are tailored to work for the short term. It is a financing tool that every real estate investor keeps in mind. Commercial hard money loan is based on the property you are buying but not your credits score.

How commercial hard money work

Real estate investment loans come in different shapes and sizes. However, commercial hard money loans are specifically used by real estate investors to fund the rehabilitation of an investment property. Most of the time, the property being rehabilitated is distressed and old, this makes it hard for most banks to finance its reintegration. Commercial hard money loans also referred to as bridge loans, landlord loans, and flipper loans are designed to help you in finance the purchase and repair of similar properties.

The difference between a mortgage loan and a commercial hard money loan

Hard money is not offered for an owner-occupied property, unlike most banks and mortgage loans. They are instead planned to benefit the approaches of those who flip their houses for profit. Buying a property with cash is the same as working with commercial hard money loans for your real estate investments. For investors who plan to fix and flip their property, the short-term of the commercial hard money loan is their perfect solution.

Hard money loans are also based on the actual value of the property, instead, they are based on the value of the property after is has been prepared, After Repair Value (ARV).

What is the waiting time of a commercial hard money loan?

One of the main reasons why real estate investors prefer hard money loans is the quick turnarounds for funding. A conventional bank loan can take up to 45 days. On the other hand, commercial hard money loans provide pre-approval in at least 30 seconds and you can get money in at least seven days. Commercial hard money loans also provide flexible terms of payments. You can invest with the option of repaying your loan up to 30 years.

How can I use commercial hard money loans?

Hard money is used by real estate investors as a critical component of productively flipping investment property. Commercial hard money loans give a quick purchase of a property and still leave sufficient rooms for maintenance. The main advantage of commercial hard money is the flexibility to fund for rehabilitation expenses. You can create a profit margin for a property improvement.

Where can I get commercial hard money loans?

Contact a reliable and experienced commercial hard money lender. A commercial hard money lender will work with you through an issue and will offer a creative solution that satisfies your wants.

This page has a focus on Hard money loans, Real Estate Investors was shared by Aditi Bansal.

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