10 Benefits of Hard Money Loans for Real Estate Investments

Hard money loans for real estate are financing tools that every investor should consider. This is because they have several advantages including speed and flexibility among others. Here are 10 benefits of hard money loans for real estate investors:

1. Quick Funding

The hard money loans for real estate application process is simple. You’ll only be required to fill a loan application form, and you can be funded after conversing with the lender for a few minutes. This cannot be compared to the several pages that you will be required to fill by your bank and the several days or weeks before your loan is approved. When your hard money loans for real estate has been approved, you can expect to get the funds anywhere between a week or two. However, in case you need hard money loans for real estate urgently, reputable financiers can fund you within three to five days.

2. A Perfect Credit Score Isn’t Necessary

Your bank will require a perfect credit score and an income history before approving your loan. In case you have a poor credit score, or you don’t meet the bank’s criteria, your loan request won’t be approved.

Hard money loans for real estate lenders don’t require all these formalities. They focus on the value of the property and down payment the borrower has invested. The hard money loans for real estate will approve if they are comfortable with the equity and valuation.

3. Make an Offer Stronger

When you make an offer with a hard money loan, your offer will appear stronger, especially if there are several interested investors with bank loans. Banks are known for pulling financing from buyers during escrow and killing the deal.

4. Lower Price and Quick Closing

Most real estate investors who pay cash are able to haggle and get a lower purchasing price and a promise for a shorter escrow period and closing.

5. You Can Use Leverage to Invest More

Purchasing properties with cash has several benefits including purchasing properties at auctions. However, because paying cash can limit the number of your investments, you can use hard money loans for real estate and get up to 75% financing. You will have money to secure properties and retain more to complete your other projects.

6. Reinvest Equity from Your Property to a New Property

When an opportunity arises, you will have limited time to act. If you are raising money to make a down payment or to purchase the property, you will have few options; for instance, cash-out refinance hard money loans real estate. You can qualify for such a loan in case you have enough equity in your property.

7. Get Finances When Your Bank Fails to Provide You With Additional Loans

Most banks will only offer loans to a single borrower up to four times. However, hard money financiers don’t have such limitations. Their main concern is only your equity in the property.

8. Will Approve Your Loan Even When You Have Issues on Record

When you have issues such as bankruptcy or foreclosures on your record, they may prevent your bank from financing you. However, hard money loans for real estate lenders will focus on your equity and not past records.

9. Flexible Lenders

Bank lenders are often very rigid and have very strict rules and regulations that can prevent you from getting your loan approved. Although hard money lenders also have regulations, they aren’t as strict.

10. Obtain Real Estate Advice from a Professional

Because your hard money for real estate lender wants your deal to go smoothly, he or she will give you an honest opinion.