How Real Estate Investors Use Hard Money Loans

If you are a real estate investor, you probably know the struggles of buying that new property that just popped up on your radar. Your money is likely not very fluid because it is tied up in a number of different properties. This can make it a challenge to expand your investments. However, you can get hard money loans to help you continue making investments. In order to understand how real estate investors use this type of loan, you have to look at what a hard money loan is and the types of properties it can support.

Simply put, a hard money loan is a short-term loan that is secured by real estate. This type of loan is typically funded by private investors rather than banks or credit unions. The terms can range from one to five years, depending on the source of the loan. The amount that you get in this type of financing option depends primarily on the value of the property you are using to fund the loan. The beauty of this loan is that you can use a property you already own or the one that you are trying to purchase as collateral for the financing.

Hard money loans do depend on your credit history, but it more so depends on the property’s value. The fact that the property value is more important than your credit means that it may be easier for you to get this type of loan than a conventional loan, especially if you have had a recent short sale or foreclosure. Many real estate investors have these mars on their credit, which can make it challenging to get a loan when you need it.

This type of financing option can be used for a myriad of property types, including residential properties, industrial properties and commercial properties. This means that no matter what type of properties you invest in, you will likely be able to qualify for a hard money loan. You can then use the money that you get to buy a new property and continue your cycle of investing.

You do not have to miss out on great opportunities just because your money is tied up in other properties. Look into hard money loans today to find out how you can use the properties you own or are going to own to fund the properties you are trying to buy. Talk with the different investors to make sure that they will be able to give you a loan for the type of property that you are trying to buy.

SHARE IT:

Related Posts

Leave a Reply

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>