There is money to be made in real estate investing, but you must leverage enough capital to get started. Smart investors like to move fast and take advantage of alternatives California investment property loans available through hard money and personal lenders.
Here are a few ways to consider this financial tool:
Fast and Convenient Alternative to Bank Loans
Traditional banks can help you if you occur to have good credit and sizable savings. Banks offer stability and low interest rates, but qualifying is difficult and slow.
Banks often require supporting documentation to prove income and assets which can delay a deal for weeks or even months. During that time, your competitors are stealing attractive properties from the market.
Hard money lenders often approve transactions within five days, and a few may even offer same-day approval.
Hard Money Loans Are for Investment Loans
These short-term loans meet the needs of investors and offer many conveniences to entrepreneurs beyond quick approval.
Real estate investors appreciate these hard money loan features:
- Loans for all sorts of property including multi-family, commercial, land and rental
- Lenders that focus on property as collateral rather than credit, income or assets
- Financing based on After Repair Value (ARV) rather than current market value
Due to increased risk, interest rates are much higher. Unless the house owner is in dire financial straits, traditional bank loans are still better for financing private residences.
Hard Money Loans are Short Term Offers
Hard money loans are often called “bridge loans”. Investors do not buy bridges. Instead, the term refers to short-term loans. Most borrowers only have twelve months to repay the whole balance.
This strategy works well for rental investments and house flips. A landlord might use a hard money loan to bridge the gap between two long-term bank loans. A speculator can even use one of these loans to hold property long enough to refurbish and resell it.
Are you thinking about real estate investing? Let us help you find the best hard money loans Los Angeles has to offer. Also, contact us and ask about the best private money lenders that San Diego is hiding from the public.
