Need Extra Real Estate Financing? Try Hard Money Loans!



You’ve just come across the perfect investment property. It’s a fixer-upper, but the renovations aren’t too extensive. It’s in foreclosure, and the auction is 10 days away. The price is a steal, and your real estate agent anticipates you can sell it for at least twice as much after your contractor is done fixing it up. It’s a no-brainer, but you’re still waiting for your last investment property to begin turning a profit. What do you do? You look into hard money loans to finance your venture.

Hard Money Lending Basics

Hard money loans are not traditional bank financing, which works to their advantage. You wouldn’t be able to participate in the foreclosure auction if you walked into your bank for a property loan. Traditional bank loans require good credit, a ton of collateral, and about 30 to 45 days to approve your loan application, which in and of itself is a daunting pile of pages that must be filled out and backed up with any requested documentation.

The only thing the hard money lender will require is information about you and the piece of property you wish to purchase. Hard money loans are funded by private investors, not big banks, so they are more willing to work with you even if you don’t have good credit. Rather than asking you to back up their loan, they’ll use the house that is in foreclosure to back it up, so your loan will be based on the property’s value and not your personal credit score.

Hard Money Lenders

This might seem too good to be true, but it isn’t. Years ago, hard money lending was considered almost loan shark in its practice. Many lenders issued loans they knew borrowers couldn’t pay back just so they could secure the property used as collateral. These days, real estate investing is a huge commodity on the stock market, and hard money lenders are professionals who are interested in real estate investing as much as you are.

These people are willing to work with you to help you realize your investing dreams, because they benefit from the interest collected on the loan and your future business. As any financer will tell you, some of the most profitable investments have very quick turnovers, and real estate investing is no exception. Hard money loans are designed to help investors purchase commercial property to turnover for a profit almost immediately, and the lenders who specialize in this type of financing are in it for the long-haul, just as you are.


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