Sometimes it can be very hard to find a trustworthy and reliable financing option, especially when you trying to purchase or refinance investment property. Despite the availability of the traditional sources of financing via banks, venture capitalists, among others, it might still not work in your favor. Most of these traditional lending institutions tend to take a long time to approve the loan and usually require you to undergo a very stringent evaluation process. They also take lots of factors into consideration, such as your credit score, and your repayment capacity which leaves for a very little chance for loan approval. On the other hand, hard money lenders don’t rely entirely on such factors.
Unlike the traditional lending institutions, hard money lenders basically offer investors the opportunity of borrowing short term loans; usually anywhere between 6 to 60 months, depending on the situation and individual lending company.This makes a trusted hard money lender essential for any real estate investment team. Whether you are new in real estate investment, or you are a seasoned veteran, it is very important to have a trustworthy hard money lender on your team. Actually, there’s nothing more advantageous to any real estate investor, than fostering good relationships with the hard money lenders.
The best real estate investment opportunities are normally captured by the investors who are well prepared. The best deals usually present themselves sporadically, and most times, there are usually many other interested parties. As a real estate investor, you need to move swiftly, and you can do this by obtaining short term financing from a hard money lender. That being said, lets now take a look at some of the other reasons why it is great to have a hard money lender you can trust.
As aforementioned, most real estate deals are usually time sensitive, and using hard money lenders is the best way of ensuring that you get quick funding whenever necessary. Unlike most traditional financial institutions, applications for hard money loans involve much less paperwork. Hard money loan applications are usually only about four pages of basic information and can be approved very quickly once they have been filled and then returned to the lender. This allows real estate investors to take advantage of opportunities which might come up at any given time. A trusted and reliable hard money lender will provide you with quick assistance and help you obtain hard money loans to purchase that property or even refinance investment property.
One of the main reasons you should have a hard money lender on your team is their versatility. With hard money lenders, it is possible for an investor to have a lot more negotiation room of the loans terms. You can be able to tailor a repayment schedule to fit your particular needs; this gives you the chance of investing in a variety of different deals and commit to deals which you find most lucrative. This increased versatility, combined with the fast approval, allows you to take full advantage of the opportunities which would have otherwise passed you by.
Hard money lenders are usually equity based lenders, meaning that they are mainly concerned with the real estate value which will secure that loan, and less concerned with the borrower’s credit scores; When it comes to obtaining loans from a commercial hard money lenders, the collateral, and the business plan is much more important than the credit scores.
Applying for a mortgage is time-consuming. It can take many months to close on loans, which can put you at risk of losing out on that particular investment property. Fortunately, with hard money loans, it is possible to get the much-needed funding in a couple of days or weeks. This is important especially if you are funding a large scale development project, and you do not want any deviations whatsoever, from the set timeline to completion.
Unlike most traditional financing institutions, hard money lenders normally have their very own sets of rules and regulations which make it easy and quick to approve the hard money loans for the borrowers. In addition, the hard money lenders are much more open-ended in nature, which means you can talk to them and discuss the terms which will best fit your particular needs. This can include varying the loan amount based on the investment property or the renovations which the property needs.
Well, in life even the best-laid plans are subject to change. If your deal happens to go well, the very last thing you want is getting penalized for the success. Unfortunately, most traditional financial institutions usually tend to charge hefty prepayment penalties when circumstances change, and the loan is partially or fully repaid before the set date. Hard money lenders are always fully invested in your success, and they typically structure the loans without any prepayment penalties. This is another great reason to have a trusted hard money lender on your team.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.