Where to Get a Real Estate Loan

Where to Get a Real Estate Loan

Where to Get a Real Estate Loan

A real estate loan, they say, is harder to find than an investment property. When you see a vacant boarded up house in a nice neighborhood, that's already a possible investment property that can be rehabbed. But where will you get the money to purchase and repair the house? That's the question everybody seems to have in mind. Exactly where do you get real estate loans?

Most banks offer housing loans. Such a loan will allow you to purchase a property. But if you want to use the house as an investment, as a rehab for example, you will need additional money. You will need a bigger loan, one that is able to support the requirements of the real estate investment. You can try borrowing additional money from other banks but that would be inconvenient on your part. You will need to double your effort and undergo the application process twice. This isn't the only way to get financing for deals. Some lenders can provide real estate loans that will suffice the needs of the deal you have.

Take the case of hard money lenders for example. These are non-traditional lenders who are willing to give up to 70% of the after repair value (ARV) of the property you wish to purchase. The ARV is the estimated value of the house after you completed the improvements it needs. In most cases, the 70$ ARV loan given by the lenders is enough to bear the expenses of a real estate rehab deal. In this form of financing, hard money, you will only need to apply for one real estate loan. That's less hassles on the part of the borrower.

The next question in your mind is perhaps "Where do I find hard money lenders?" Unfortunately, these creditors are harder to find than traditional lenders like banks. But if you are engaged in the local real estate scene, you'll easily spot them. When attending a real estate seminar, ask attendees whether they know someone who can extend a real estate loan. Or, you can ask you colleagues and relatives if they know one. Another method of finding these lenders is by advertising on your local paper. If you're lucky, you might even see one of their ads.

The easiest way perhaps is to search for them online. For instance, you can go to RehabHardMoney.com and join its nationwide network of borrowers and lenders.

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