If you want to invest in real estate, you should have enough capital for your project to be successful. Sometimes, investors tend to explore different options for financing their projects as the most popular way is through bank loans. Nowadays, other faster loans, like hard money loans, which experienced real estate investors utilize. Although hard money loans have several cons, their benefits overshadow them. Here are the pros of using loans for realtors.
Higher Chances of Getting Approved
Most investors face challenges when applying for loans from their respective banks. This is because the traditional banks follow a process requiring investors to show their proof of income and the estimated value of the potential real estate and follow certain procedures to get a loan. If a detail misses the requirements, the bank rejects your loan request. That’s where hard money comes in. The hard money lenders never consider your credit history. Instead, they allow you to keep the potential real estate as collateral. According to statistics, hard money lenders usually follow an approximately 60% to 80% loan to value rate. They always give you a loan amount equivalent to your property’s value.
Fast Approval
Unlike borrowing a loan from the bank, which takes 30 days to be processed, hard money loan programs get approved within a blink. Suppose you are looking forward to getting instant money. In that case, hard money loans are recommended because real estate property’s value fluctuates after a week, and waiting for 30 days can inconvenience your project.
Convenience
Borrowing money from traditional banks can hinder an investor from running other beneficial deals. For instance, if an investor borrows money from a bank for one property and finds another profitable real estate deal they wish to engage in, the bank allows them to repay the loan first or sell the previous property before they hop into another project. This is not the case with hard money loans. You can borrow money for several projects, and the lenders will approve your request, increasing your earnings with the increased number of properties you invest in.
Referrals
The lenders can introduce you to other professional investors in real estate hard money borrowing. Professionals may have other great deals you might consider investing in if they benefit you. This referral network can get you to know new properties you can finance and elevate your business to better approaches.
The main features attracting real estate investors are speed and flexibility in the hard money-borrowing process. This is why the hard money borrowers excel, because the lenders make the process easy, allowing the investors to have time for other projects. If you want to achieve your real estate investment dreams, contact us today.
