Investing in real estate can be a lucrative venture. You can also make money in a number of different ways with real estate, depending on your particular goals. But getting started in this niche – as well as continuing to purchase property – takes money.
For many in this field, continuing to purchase property using banks and traditional lenders may not be an option. So, what can you do when you’ve found a great deal but the banks are telling you “No”? One option is to consider a hard money lender.
A hard money lender is usually a private individual or small group of investors who will loan money, based upon the property you are purchasing as versus on your personal financial details like your credit score.
These types of loans will typically come with a much higher interest rate than that of a bank or other traditional lender. A hard money loan will also usually have fairly high origination fees for the borrower. So, why consider borrowing like this?
For one reason, it can be much easier to obtain a hard money loan. In fact, if you already have an established relationship with a hard money lender, you may even see the funds that you need within just a few days, as versus weeks (or longer) by going through a bank.
You may also be able to borrow up to 100% of the purchase price of the property. While this may have been possible to do via banks and other lenders prior to the economic crash of 2008, this is not the case today.
It is important to be aware that you will need to back up the loan with real assets. You will also need to ensure that the deal will still be profitable when going this route for borrowing.
Once you have purchased the property, turning over the day to day management details to a property manager can help to ensure that you are making the best use of your time. For more details, Give Us a Call.