subject: Rehab-real-estate: Flash Good Deals To Hard Money Lenders [print this page] If you have a good deal in hand and you want funding for it, to hard money lenders. Also known as private lenders, they are willing to finance real estate investments they think are profitable.
Private lenders do not scrutinize your credit score but will still aassess whether you have the capability to repay the loan. They do this by determining the profitability of the deal you want to close using their money. They will assess the fixer upper you plan to fix and flip if you are into rehabbing houses. If they see that you plan for the property will result in positive returns, then you will get the financing you need.
Hard money lenders allow rehabbers to fix and flip property without having to spend a cent from their personal money. Heres how it works: For example, you plan to buy a $60,000 fixer upper and make some $10,000 repairs to raise its value to $100,000. This is a good deal.
Hard money lenders usually give between 60% and 70% of the after repair value (ARV) of the property, which is this case is $100,000. So 70% of that is $70,000. Thats the amount youll get from the hard money lender. Your total expenses will hit $70,000. That means you get to buy a property and fix and flip it without spending personal money. Thats the beauty of rehabbing houses using hard money financing.
This 100% financing is noe major advantage of hard money financing over traditional loans. If you sought credit from traditional lenders such as banks, you will only get $60,000 or the amount needed to buy the property. As for the repair costs? You have to finance them using your own money.
What makes it sweeter is the fact that you can get the financing in just a matter of days. Hard money lenders release loans in days to make sure you purchase that fixer upper home you want to rehab. They understand the stiff competition real estate investors are in and would like you to emerge the winner. After all, they will only earn profit if you are able to buy and rehab that property.
Tapping hard money lenders is a wise idea for those who want to proceed with real estate investments but are short of personal capital. Learn more about private lenders at rehab-real-estate.com, your ultimate source of information about rehabbing houses and real estate investments.
