Many investors tend to shy away from hard money lending due to shady lenders that have created a bad name for hard money loans. However, there are licensing compulsions and strict regulations put in place by the states, which lenders have to adhere to. Here are a few advantages if you are considering a hard money loan for your next real estate project.
They Say NO Less Often
Real estate investors are having a hard time getting a loan from traditional sources like banks. There are lengthy procedures that traditional sources follow before granting an investor a loan, and eventually, they may fail to give. While hard money lenders will still keep the property as collateral, hardly do they consider the investor’s credibility or say no. However, they will check to ensure the loan amount is equivalent to your property’s value.
Close the Deal easily
While the traditional banks may take about a month to grant you a loan, hard money lenders can approve your loan in a matter of days. Considering that the value of a property fluctuates weekly in the real estate world, you will need to get your hands on cash as soon as possible. This is why hard money loans prove to be a better alternative than traditional loans.
Traditional loans may have lower interests, but there are requirements like bank statements, income documentation, leases, and tax returns that you have to provide. That can be exhausting. Hard money lenders approve your loan in a short time with few documents required.
Improve Buy and Sell
As a real estate investor, you may run into a profitable deal while you are yet to sell or settle the loan repayment for a previous one. Hard money lenders are flexible as you can buy a new property even if you are still engaged with the previous one. This flexibility allows you to earn more from the increased volume of buying and selling properties.
Get Referral Business
While looking for real estate hard money lenders, you are likely to run into other real estate professionals who may introduce you to other lenders with better deals. You get to network, and you can be introduced to new properties to invest in.
With such advantages from hard money loans, most investors prefer to deal with hard money lenders rather than traditional loan sources. Are you thinking of investing in real estate and you lack the funds, consider getting a loan from New Horizon Capital Funding.