Real estate hard money loans have been a preferred financing option for real estate investors. The veterans of the real estate industry understand the benefits of hard money loans, and they don’t hesitate to take advantage of them when the need arises. Here are the reasons why.
1. They Have Fewer Requirements
Hard money lenders typically have fewer conditions than bank loans. The requirements for real estate hard money loans typically include sufficient equity in the property, adequate cash on hand for the monthly payments, a feasible exit strategy, and experience in some cases. Fewer criteria to meet equals a greater chance of your loan being approved. Banks have extensive lists of criteria that borrowers must achieve to qualify for lending and are notorious for saying “No” more often than “Yes.”
2. They Have Faster Approval and Funding Times
One of the primary advantages of getting real estate hard money loans is the speed with which the loans are approved and funded. Investors who have never utilized hard money loans before will be shocked by how fast hard money loans are financed compared to bank loans. In some cases, a hard money loan can be financed within 3-5 days.
In comparison, it takes a bank 30+ days to finance. This rapid funding has rescued countless real estate investors who were in escrow, but their initial lender withdrew or simply failed to fulfill. This is an ideal circumstance for a hard money loan to provide immediate funding to rescue the deal.
3. They Can Be Tailored for Special Projects
Hard money lenders tend to finance loans that traditional lenders, such as banks, cannot finance. A fix and flip loan is an excellent illustration of this. These projects include a real estate investor using a short-term loan to finance the purchase of a property, intending to swiftly complete necessary repairs and improvements, and then finally sell the property.
Typically, a real estate investor needs a 12-month loan which is incompatible with the business model of most banks. Banks prefer long-term loans and are content with earning a small interest rate over an extended period.
Hard money loans are known for the speed, convenience, and flexibility they offer. Smoother and faster loan processing will allow you to focus on other important aspects of the project. Take advantage of hard money loans today to enjoy these benefits. Contact us today for more information!