Using hard money loans for investing in Real Estate has several benefits. For one, the application process for a hard money loan tends to be considerably faster than a comparably sized conventional loan application.
Many real estate investors use hard money loans to invest in real estate projects, be it a rehab, or simply to purchase a property that has potential when you may not have the available cash to invest. There are several other benefits to a hard money loan that you may not have considered.
- In many cases, hard money can be lower cost than cash flow financing facilities like subordinate debt and factoring.
- As a bridge loan, these funds are normally outstanding for a short period of time so the shorter the use, the lower the potential cost.
- From a cash flow point of view, an interest only payment, even at a high rate, can still be less strain on the cash flow.
- Hard money can also be extended against non-real estate assets where real estate is still the primary security in the overall security package for the loan.
A hard money loan for investing in real estate can be the best way to go in the long run. Investors can take out hard money loans to buy a property, as long as they provide acceptable collateral – in this case, it could even be the property they’re buying.
The strategy here is to find a pre-foreclosure property, or any real estate with an owner prepared to sell below market value. If the investor can re-sell the property at full market value, before too much interest is paid on the hard money loan, he or she can make a significant profit.
Using hard money loans for investing in real estate is a great way to get started in real estate investing and even help seasoned investors grow their investment strategies.
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Hard Money Loans for Investing in Real Estate
DFW Hard Money is a lender offering real estate hard money loans in Fort Worth, Dallas, and the DFW Metroplex. We strive to make the process quick and easy for all parties to the transaction and offer competitive rates in the current hard money lending marketplace.