How to Purchase Rentals Using a Hard Money Refinance With no Money Down

    by Aditi Bansal

Updated on Thursday, April 27, 2017

Hard money loans for real estate give you a solution to fund your business. Hard money loans for real estate can be used to buy rental properties, fix and flip until a long-term financing is acquired.

tags  #Hard money loan for rentals  #Zero Money Down #


Hard money loans for real estate can be a great option for you, and you can use them to buy rental properties with no money down by using a traditional loan refinance.

Hard Money Loans

This is a type of financing that is often used to finance properties over a short period. Hard money loans for real estate lenders have different conditions compared to conventional loan lenders. A major difference is a high-interest rate. Hard money loans for real estate lenders charge a 12 to 16 percent interest and points for these loans. Points are calculated as a percentage of the hard money loan, and they can easily accumulate if the lender charges 2, 3 or 4 points for a hard money loan for real estate.

Why Should You Consider Using a Hard Money Loan?

The main benefit of a hard money loan for real estate lender is that they will provide you with the entire loan amount you need to complete your transaction. Most of these lenders base the total loan amount after ARV or repaired value. Some can loan you 65 to 70 percent of ARV. Keep in mind that this isn’t the purchase price, but the value of the property after fixing it.

Where Can You Locate Hard Money Loans for Real Estate Lenders

There are several hard money lenders, but some only lend in specific states, while others can lend at a nationwide level. However, the best way to locate hard money loans for real estate lender is by searching for one near you on your search engine.

Private Money on Investment Property vs. Hard Money

Private funds are availed by a private individual. This financier isn’t a mortgage company, bank, portfolio lender or hard money loans for real estate lender, but just a single person. Most people will be willing to fund real estate projects because the interest rates on other secured investments are often low. Wealthy people continuously look for high yielding and secured investments, and real estate financing may be the best answer to generate high returns.

How to Buy a Rental Property With no Money Down by Using a Hard Money Loan

Hard money loans for real estate make it possible to purchase a rental property with no money down. In case you were to obtain finance for repairs, you can refinance your hard money loan without a seasoning period. Fannie guidelines don’t allow cash out refinancing without an interest period. However, the property will have a higher loan than the purchase price due to the financed repairs. Obtaining a long-term loan will replace the hard money loan, and you won’t have to wait for a year like is the case in cash out refinance.

How to Use a Conventional Bank to Finance your Short-term Investment Property Loans

There are a few banks that can provide short-term loans to property investors. They are often very hard to locate, and you need to have a good relationship with such banks. You can use a portfolio lender to refinance your short-term investment. Traditional banks also have another loan in the form of lines of credit. However, you will be obligated to give real estate collateral. If you have a property that you have equity in, then you can qualify for a line of credit.

This page has a focus on Hard money loan for rentals, Zero Money Down was shared by Aditi Bansal.

Share this on: