A hard money loan is perfect for real estate investors who can't afford to buy an investment property on their own. Some people might think that this particular type of loan might be hard to obtain because of its name. However, this is not really the case. Unlike in traditional financing, hard money loans are easier to procure and it only take a few days -not weeks or months - to get your loan application approved.
Basically, a hard money loan is type of asset-based financing wherein a lender approves a loan based on the deal or the selling potential of a property for which the loan is made. It is usually given by private lenders, who have a big amount of ready money on hand, or a small venture capital group.
For a real estate investor, securing such a loan has many advantages compared to traditional financing. Listed below are some of them:
* A borrower doesn't have to present credentials or report his current financial status just to get a loan. Because a hard money lender relies on the value of a property to determine a loan's eligibility, an investor can still have his loan approved even if he has a bad credit score.
* Since lenders usually disregard a borrower's credit history, loan approval is quicker.
* Some lenders provide a 100% financing on some deals.
* A property's repair cost is usually covered.
* A borrower doesn't have to deal and negotiate with a panel of loan processors.
If you are planning to acquire the services of a hard money lender, there's a number of ways to find someone who's willing to provide financial assistance for your real estate business. You can either consult members of the local real estate investing association or ask those involved in the financing business for referrals. You can also ask accountants since some of them have clients who have access to quick cash.
In addition, you can visit RehabHardMoney.com, a site that brings together thousands of hard money lenders and borrowers from all parts of the country. By logging on to the site, you can secure loans faster, easier, and without the fuss.
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