Closing Deals with Hard Money Private Lenders
Put quickly, these lenders enable investors to proceed with a deal. Obviously, when the deal does not proceed, no profit is made. Hard money loans have various qualities that make this happen. The first quality is speed of processing. Take note that banks and other traditional lenders need at least 30 days to process loan applications. In the world of real estate, the deal often comes to those who can close fast and not to those who offer the higher amount. This is especially true in today’s market where the sellers are very motivated. They want to opt out of the financial problems they are in fast; if you can’t get the financing you need fast, chances are they will talk to other investors. Another good quality of tapping hard money private lenders is their system of processing applications. They are not borrower-based when going through applications. What matters to them is the collateral you can provide. This form of lending is asset-based. For real estate investors, the investment property serves as collateral. In short, if you have good collateral to offer, the loan is likely to be approved. And because these creditors are not borrower-based, it wouldn’t matter if you are unemployed right now. They can overlook the words “foreclosure” and “bankruptcy” in your credit history because they probably won’t even look at it the document the first place. If you went to banks unemployed and have been foreclosed upon and bankrupt a few years back, expect your application to be rejected. A rejected application is a real estate deal gone to waste. Lastly, hard money private lenders can provide bigger financing. That’s because they use the value of the collateral in good condition when computing loan amounts. For example, if an investment property is currently worth $35,000 because it is in disrepair, they won’t look at that. If the house is worth $100,000 in good condition, or after the investor repaired it, then they will base the loan on that amount. These creditors often lend up to 70% of the good condition value. In this case, the investor will get $70,000 to buy a $35,000 house. He will use the rest of the money for closing, interests, and other expenses. With banks, you are likely to get $35,000 because that’s how much you need to purchase the house. If you want to close rehab or other real estate deals through hard money loans, like other successful investor are doing, simply go to RehabHardMoney.com and look for a lender from its nationwide network. Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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