Developers, house flippers and long term real estate investors are the blood of the hard money business. These type of real estate investors main concern is getting the deal and making money from it. Hard Money will provide these investors the money they need to purchase/refinance their real estate within days without looking at their tax returns or credit.
House Flippers: A house-flip project can be finished in a matter of months and most people don’t want to go through the hassle of taking out a long-term loan. Hard money loans are perfect for house-flippers because they’re short-term loans that can be paid off in a matter of months once the home is purchased, repaired, and sold.
For individuals who are new to house flipping, hard money loans are the principal form of financing. Hard money and private money loans are ideal for novice house flippers because hard money lenders care more about the potential value of the property than the borrowers financial qualifications.
Builders: Constructions loan are short term interim loans for financing the cost of construction. The lender advances funds to the builder as the work progresses. They are either obtained by the home-builder or prospective owner. Many contractors use hard money loans to buy a lot, build on it, then sell the new structure and pay off the loan quickly.
Investors: A savvy real estate investor may come across a great deal on a property that needs to be bought right away. A great aspect of hard money loans is speed. Borrowers can be approved for hard money loans in a matter of days.
People with Bad Credit: People who rejected by a bank for a conventional loan because of bad credit, a foreclosure, default, or other red flag on their recent credit report can use hard money loans to buy a property that would be unavailable to them otherwise.
Hard Money is a private lending alternative for Real Estate investors. Private investors/Lenders will lend their money and will use the property as the collateral. Usually these loans cost (percentage-wise) much more than an average mortgage, often times up to twice what a regular mortgage does, plus high origination fees. Hard Money Lenders normally don’t make decisions based on credit but, instead, make them based on equity and income.
This is ideal for investors interested in house flipping and those looking to buy, rehab, rent, refinance, and repeat (BRRR). These methods make cashing out the hard money lender fast and easy so that you can move on to the next project.
Contact the specialists at HML Investments today for more information about hard money loans.