subject: Hard Money Lenders: Who Are They? [print this page] As a real estate investor, it is important to have someone who can help you financially, especially if you want to obtain quality investment properties that would bring you big profits. Therefore, it is best to form an alliance with hard money lenders.
Contrary to what the name implies, it is much easier to obtain loans from hard money lenders compared to traditional lending institutions such as banks, credit unions, and mortgage companies. In addition, it only takes these people a few days to process your loan application.
The loans provided by these lenders are called hard money. Unlike their traditional counterparts, hard money loans, or HMLs, are asset-based. It means that a loans eligibility is verified by assessing the after repair value, or ARV, of a property for which the loan is made. If the property has great potential, then a borrower can obtain the funds he or she needs.
Because of this, anyone can apply for a hard money loan, even those people who have bad credit scores. Basically, hard money lenders dont care about a borrowers credit history. As long as the property can bring a good deal, they will loan money to borrowers. Thus, if you are a real estate investor who cant obtain a bank loan because of your bad credit history, securing a hard money loan is the best way to go.
With hard money, you can easily buy the investment property you want because you dont have to wait months just to get your loan application approved. It is because most private money lenders dont require their clients to submit documents regarding their financial status and other credentials, a task that could take a huge amount of time.
Real estate investors are the ones who would mostly benefit from dealing with hard money lenders, especially those who rehab houses for profit. Some lenders will agree to cover the repair of an investment property, which is something that a traditional lender wouldnt do. In addition, they could provide 100% financing for some deals.
Hard money loans have higher interest rates compared to those provided by banks and other traditional lenders. However, obtaining them is faster and easier so you really have nothing to lose if you deal with hard money lenders.
If you want to learn more about hard money lending, you can log on to REIWired.com, youre prime source of quality real estate education.
