Hard Money Lenders And You Future As Investor

You can treat hard money lenders either as a friend of a foe

. Look at the high interest rates they use and youll feel that they are just selfish individuals who want to cash in on other peoples deals. Look at how fast they process loans and youll realize that they actually want to help you to profit from that deal. So, will hard money lenders help you attain the future you want for yourself and your family?

The truth be told, these lenders are simply individuals who have ready money. They are just businessmen who also seek to protect their assets. If it was you, you would also like to make sure you get your money back and earn from it. They use high interest rates because they are more exposed to defaults. They are more susceptible to losses. Take note that these lenders finance loans that banks and other traditional lenders usually find to be too risky to fund. Hard money lenders grant credit even to people who have a poor credit score and that is why they are considered a salvation by many borrowers. They use the high interest to make up for losses.

The high interest rate is also the consequence of a swift processing of loans. They need only a few days to release money, unlike traditional lenders, which take at least 30 days to process applications. Real estate investors hardly care about the high interest for a couple of reasons. First, the rate of return is more than enough to offset the interest. Second, they need the money fast to make profit and that is something they could not get from traditional lenders.

Going to hard money lenders is also favorable for many real estate investors. This is because these lenders use a different formula when granting loans. Lenders look at the ARV (after repair value of the property) and not its current value. For example, a bank will give you $55,000 if the fixer upper you want to rehab is worth that amount. In the case of hard money lenders, they will give you around 70% of the ARV. If they see that that property will be worth $100,000 after you make some repairs, then you will get $70,000. You can use the excess money for the repairs. That means you will be able to buy the property and probably repair it without spending any money from your pocket.

If you still doubt that hard money lenders will help you achieve the future you dream of, go to Rehablist.com today and get more information about them and on real estate investing.

by: Daniel Mc Grey

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