Why Commercial Real Estate Investors Use Hard Money Loans
Hard money loans are known as loans for those with bad credit or questionable issues in their record. But Commercial real estate investors still use hard money loans for the painless application process and the quick turnaround time for one to buy property to fix and flip. Here are more reasons they choose hard money loans over conventional bank loans.
Hard Money loans can be given quickly
Hard money lenders fund the loan swiftly. Hard-money loans can be repaid within one week in certain cases. Contrast this with the 30—45 days it takes to get an approved bank loan. This typically requires a day or two to qualify for a hard money loan and, in certain situations, they approve a hard money loan the next day.
Hard money loans strengthens an offer
A real estate developer who places an offer on the table with a hard money loan is seen as solid. This is useful in cases of properties, having offers from many buyers with conventional bank loans. Hard money borrowers are not prone to receive funds for frivolous purposes and may thus be a more secure source of finance than traditional lenders.
Getting a hard money loan is easy without looking into recent issues
A bank may not offer financing because of many issues in the borrower’s record such as recent short-sales, bankruptcies, changes in loans, and foreclosures. Since hard money lenders focus on assets, they see beyond these problems. They look into the borrower’s equity (or down payment) in the property in question and the property’s value that will be collateral for the loan.
A real estate investor does not have to wait and not take a chance on real estate investment due to an issue on their record.
Work with a flexible hard money lender
Traditional bank lenders are strict and have laws and regulations that prohibit borrowers from receiving approval for loans. Although hard money lenders have certain conditions for borrowers to meet for approval, they are considerably less than a bank’s criteria.
A hard money lender is much more likely to meet with a borrower on a problem and to provide a constructive approach that would please the parties involved. Let Pinetree be your guide in your journey to becoming a commercial real estate investor. Contact us today to get your project started.