Investing in real estate can be a profitable venture. However, this can also be a markedly expensive one, especially when you need to finance this purchase upfront.
Fortunately, there are avenues that can help. Investors can rely on hard money loans for the specific purpose of getting a favorable loan quickly. In fact, investors in the Atlanta, Georgia area can turn to as many as 50 hard money lenders within the bounds of the nation-famous Dogwood City.
Too many overlook this valuable resource, however, because of the many misconceptions about hard money lenders and hard money loans. Learn about some of the most common myths in the industry to discover what is and isn’t true. Here are just a few things most people get wrong about hard money loans.
Hard Money Loans Are a Last-Ditch Effort
These loans are actually not suitable for borrowers with massive amounts of debt. They aren’t a good option for borrowers who are desperate, who are living paycheck-to-paycheck, and who will struggle to pay the funds back.
It’s not wise to turn to hard money lenders as a last resort or last option. Rather, hard money lenders provide funds on short notice. Because flipping houses and investing in real estate can be a time-sensitive pursuit, investors may not be able to secure funds through a traditional bank loan in that short time frame. That is where hard money loans come in. Hard money loans get you the money you need more quickly, although borrowers are just as responsible for paying the loans back in a timely manner.
Anyone Can Get One
While hard money loans expedite the loan process and may skip certain formalities or red tape, it’s certainly not true that anyone can — or should — get one. This type of loan is convenient. Plain and simple.
However, it’s still much like a traditional loan in that the borrower will owe the funds back to the lender and be responsible for paying those funds. Hard money loans are not ideal for foreclosures or bankruptcies. They are a great option for those looking for the necessary capital to flip a home (or several homes).
Hard Money Loans Are Less Legitimate
Just because the process is considerably faster does not mean it is untrustworthy or unreliable. Hard money lenders take several steps to protect their investment and ensure the legitimacy of their loans. As with a conventional loan, people who use hard money to buy houses will be required to put money down on those homes, and hard money lenders often protect their investments with extensive knowledge of the housing market.
If you buy and flip homes for a living, a hard money lender can help. Get reliable funds quickly and without the hassle by turning to hard money lenders.