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The Process of hard money lending


paperfree Aditi Bansal

Updated on Monday, May 29, 2017

The hard money lending industry is one that is often unnoticed. Many people while borrowing money usually think of banks and conventional mortgage lenders. However, with commercial hard money loans, there are other options to acquire the money you need.  Because it is out of the public eye, many people do not know what the process of hard money lending is.

tags  #Hard money lending  #Real estate investment #

 

When you decide to invest in the real estate industry in whatever the strategy you choose, be it being a landlord whereby you fix up a distrait house and rent it out to renters, or maybe fix up a distressed property and selling it out. The success of whichever strategy you choose is determined by whether you have the right funding or not.

Investing in the Real Estate Industry

You will be offering a brilliant opening for investment in the irregular stock market if you decide to invest in the real estate industry. It generates equity that is often a good base for future investment prospects. You can make an easy and a lucrative strategy by simply borrowing commercial hard money loans against real estate property. It is a less risky investment strategy to flip properties, invest in property cheaply and to sell it at a higher price after rehabilitating it.

To several property flippers, the strategy of buying and fixing is very tactical therefore the entire sale is going toward additional property investment. Real estate investors are very cautious about the leasing and management issues because flipping is projected to only keep finances at low risk for only a short time.

Alternatively, some real estate investors are buying a distressed property, repair and renovate them and then rent them out to renters. This is referred to as buying fixing and renting (BFR) strategy. It allows investors to purchase homes at a reduced price providing an extra cash and equity. This type of long-term investment strategy is suitable for those investors planning to develop their wealth.

You will need funding for whichever strategy you are investing. This is where the money loans come in.

Commercial Bridge Loans

Commercial bridge loans are sometimes referred to as construction loans, commercial hard money loans, private loans and rehab loans. Commercial hard money loaning is a real estate funding which enables investors to buy and renovate a property. It does not follow common principles that are usually observed by traditional banks and mortgage brokers. There is full leverage for distressed properties and room for renovation with commercial hard money loans.

The commercial hard money lending process

After you have decided the type of real estate investment strategy, the next thing is to know where you will get the funding for your investment. Here are eight simple steps to get the commercial hard money loans.

  1. Let your hard money lender know the investment strategy of your choice and see the requirements.
  2. Search for an ideal house and put an agreement under contract
  3. Work out the estimated costs of repairs, determine the ARV worth and the contract price.
  4. Apply for the commercial hard money loans with your commercial hard money lender.
  5. Provide your hard money lender with the precise documents that will be required to confirm your paperwork.
  6. The lender will then submit your application, and you will be informed whether the project was approved.
  7. You loan officer will order third party services that often comprise the assessment, tittle and property scrutiny among others.
  8. You will finally sign the necessary documents to seal the deal. Your commercial hard money loan will ultimately be funded.


This page with a focus on Hard money lending, Real estate investment was shared by Aditi Bansal.

 
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