Real estate investing could be
such a lucrative opportunity, but yet, traditional financing doesn't always
avail itself to every investor. In these super-aggressive California markets,
hard money loans really offer a fine alternative to such financing. Since it's
not tied to one's creditworthiness but to the value of a property, hard money
loans work absolutely perfectly for fast and opportunistic real estate deals.
One of the reasons hard money
loans are popular is the speed at which they are issued and funded. Whereas
hard money lenders may take just a matter of days, traditional lenders
sometimes require weeks and in some cases months to complete the credit-issuing
process. Definitely, speed is of high essence in ensuring that opportunities
are grabbed on time for these investors.
Being short-term loans, hard money loans for
real estate can thus be customized according to the borrower's needs
and, at the same time, the real estate project. The lenders would more readily
agree to compromise on such different terms of the loan, like duration,
interest rates, schedules of repayment, and all that goes toward a customized
financing solution suitable to an investor's strategy.
Asset-Based Lending
While the borrower's income and
credit score do not matter so much, hard money loans rely heavily on the value
of the collateral asset. In that regard, hard money is more available to a
greater populace than conventional financing, such as to people with
less-than-perfect credit and untenable income streams. Apart from this, this
type of value's focus enables financing at a much higher loan amount than the
property's after-renovation or after-development value.
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