Would you like to obtain a loan without being asked any questions? If you are willing to pay what it cost, and
you are buying or refinancing real estate for business / investment purposes, these type of
loans may be for you.
With the lack of conventional lending products available to real estate investors, most investors
turn to hard money financing as a bridge loan between the acquisition of a property and the
permanent financing. Of course, hard money is not cheap, but typically is well worth the
money for the purpose it serves. In most areas, the more prominent hard money lenders
charge around 5 points and 15% interest. However, with local networking you may find
private lenders willing to charge less.
One of the biggest advantages of hard money is the ability to borrow funds for
renovation expenses. Most investment properties have some equity potential, but the
average home buyer is often discouraged by the less-than-attractive condition of the
property. As investors we create margin by having the ability to find, acquire and
renovate these properties. The ability to finance the purchase and repairs is key to this
equation, and hard money is one tool that allows us to do just that.
Once the property is acquired and renovated using hard money, the investor can wait six
months and refinance for the permanent financing. Since the renovations presumably have increased the value
of the property, we can use the new appraised value in determining the investor’s maximum allowable loan
amount. Typically, we will allow financing up to 80% of this appraised value. Best case, the appraisal will be high
enough so that the investor can refinance the balance of the hard money loan as well as closing costs without
any additional money out of pocket.
Give us a call at 954-866-0000 or email email@example.com for more information.
HARD MONEY / HARD EQUITY LOANS