Real Estate Investing Blog - DiscountedProperties.com

If you are in the real estate investing business and looking for financing for your next real estate deal, you may have a difficult time, given the current state of the credit market.

However, all is not lost, as you may want to consider securing a hard money loan. Hard money lenders are financing companies that use real estate as collateral. In other words, the real estate you plan to purchase for your investment property will back the loan. Most hard money loans are secured for non-owner occupied properties.

Hard Money Lenders 101

Hard money loans are short-term loans, backed by private investors, who charge a much higher interest rate than traditional loans because they do not conform to traditional banking standards. Soft money loans, on the other hand, are those traditional loans that are secured through a traditional lending institution.

Hard money loans serve a very useful purpose, particularly for real estate investors who are looking for a short-term loan to finance their investment properties. Although the interest rates on hard money loans are much more than traditional, soft money loans, this typically does not affect the investor, as he or she carries the loan for a very short period of time.

How Hard Money Lenders Calculate the Loan

Hard money lenders typically calculate the according to the ARV (after repair value) of the property. Most hard money lenders will loan an investor about 70 percent of the ARV. This protects the lender in case the borrower defaults on the loan and the lender must foreclose on the property and resell.

Interest rates vary between hard money lenders, but they typically range between 12 and 20 percent, depending on the investor’s credit score and real estate investing experience. Most hard money loans last anywhere from a few months to several years, depending on the investor’s needs.

Benefits of Hard Money Loans

* Hard money lenders may provide you with the loan quickly, which is important for investors that must move rapidly on a real estate deal.

* Hard money loans are ideal for beginner investors who may not have much capital.

* Hard money loans are often used by investors with poor credit that may have difficulty securing traditional loans, as they are equity-based and no asset or credit-based.

* Hard money loans can be used to refinance a default personal mortgage loan.

* Hard money loans are ideal for today’s investors that cannot secure a traditional mortgage loan due to more stringent lending guidelines.

If you are looking for ways to finance your next real estate investment, consider looking into hard money lenders to help you turn your property into profit.

When you’re trying to buy and sell as many properties as you can get your hands on, sooner or later you’re going to be faced with the reality that without additional cash, your real estate investing career is going to come crashing to a halt. A good hard money note buyer can put much needed cash in your hands today so you can get on with the business of buying more properties.

If you’re carrying the financing on one or more of your investment properties, you’re all too aware that buyers aren’t always as committed to making on-time payments as you thought they would be when you signed on the dotted line. Instead of waiting for payments to trickle in when they buyer is ready to make them, you can cash out of your contract by selling to a hard money note buyer. A hard money note buyer will pay less than is owed on the contract, but you’ll have cash in your hand you can use for other investment opportunities.

As a real estate investor, you know the importance of leverage in securing additional property. By taking advantage of the fast cash that can come your way from a hard money note buyer, you can use the influx of cash to secure much more real estate that can help you capitalize on the profit potential available in today’s exciting real estate market.

A hard money note buyer can make it happen today.