Not every real estate transaction needs 15-year or 30-year terms. Real estate investors use hard money loans to provide what conventional lenders can’t: speed and flexibility. If you need an alternative form of financing for your fix-and-flip or investment deal, hard money lending offers:
Fast Approvals & Funding
The conventional financing application process is tedious and lengthy. Real estate investors sometimes find themselves in a situation where they need the cash fast and without the hassle.
A hard money loan application is straightforward. A borrower submits a standard application and can get conditional approval after a short conversation with a hard money lender. The process is faster because the lender uses the property as collateral. That means underwriters aren’t digging deep to review tax returns, verify income, or debt-to-income.
Funds for a private money loan can be ready in days, making for a quick closing.
Negotiating Leverage
If closing fast is a top priority for the sellers, real estate investors sweeten their offer by promising a quick closing. But what if you don’t have cash on hand? A hard money loan help make it happen so real estate investors seal the deal.
Land More Deals
Having cash on hand or upfront benefits real estate investors. Cash enables them to buy auction properties and to negotiate better deals. But what happens when a great rehab property comes online, and all the cash is invested in another project?
A hard money loan gives the real estate investor enough financing to secure the next investment while leaving cash on hand for more projects.
Flexible Terms
A major advantage to private money lending is the more generous terms compared to traditional loan agreements. Private money lenders evaluate each deal individually. Once you have established a relationship with your private money lender, they may be even more willing to negotiate on the terms.
Expert Advice
Hard money lenders are invested in the project’s success. No lender wants missed payments, issues with the property, or anything that puts the project in jeopardy. Chances are, a private money lender may have been or still is a real estate investor themselves.
The lender’s experience makes them an excellent partner in a real estate deal. They are going to analyze the request and provide input about what could potentially kill the project.
Why a Hard Money Loan?
Hard money loans give you the speed and creative financing an investor needs to be competitive in today’s real estate investing market. At CapSource, we are all about building profitable partnerships and creative financing. Talk to us about a hard money loan for your next investment property.
