The Benefits of Financing Your Real Estate With Hard Money
When you purchase real estate with the intent to remodel it and sell it for a profit, you need cash fast to buy the property before anyone else does. Even though a bank application can take quite a bit of time to process, investors who deal with hard money loans can finance your project quickly and with the entire amount that you need. Here are a few ways that this type of lending can help you.
Get Money Immediately
You have a property you are ready to buy, however you are short on the cash to do so. A typical bank loan can take weeks to get approved and then receive the money to make the purchase. Hard money loans allow you to buy what you need when you require it with very little time to wait. You will only talk to one or two investors for this transaction. The fewer the people involved, the quicker the process will be. Also, there is less verification to approve you for the loan, such as your credit rating and cash flow. You will need to provide how much the land is that you want to buy since it will be the collateral against your financing. If the lender feels that it is valuable enough to invest in, they will provide the funds to you.
Can Obtain It With Any Credit Rating
Many banks will require a high credit rating before they give you the funding that you need to purchase your next property to flip. An advantage that hard money loans have is that you can be approved regardless of your financial history. This is a benefit for anyone who struggles with getting a loan for this reason. However, keep in mind that the interest rate on this type of lending is far higher than you would get with a typical lender. While an investor is willing to help you get the house you want, they will want to make a decent profit as well.
Receive All the Money That You Need
Depending on the lender, you can get close to the full amount of cash that is necessary to buy the property that you need. Banks require that you put money down on each loan that you apply for if you are approved. This means that, before you can make your purchase, you must have a percentage of the funds in your account. Investors that work with hard money loans can give you the entire amount of the sale if they trust that you will pay them back in a timely manner.