Use your existing residential or commercial mortgage loan to obtain money which can then be used for a variety of projects. These are just a few of the many reasons individuals and businesses refinance and why they often turn to a private hard money lender.
Investors get cash-out refinances on existing residential and commercial mortgage loans for a variety of reasons. In many instances, they are looking for cash with which they will purchase another property. Contractors or Realtors may use this type of funding for rehab purposes while others require capital for upcoming taxes or a nearing balloon payment. A business may need an infusion of capital for the purchase of equipment or inventory. Whatever the reason, there are several factors that draw these people to hard money financing as compared to a traditional bank loan.
Hard money lenders are not faced with the same restrictions that traditional banks are relegated to. This includes issuing commercial mortgages for investors with large portfolios of rental properties. If an investor already has a portfolio of over five properties, traditional banks may shy away from lending. A hard money loan can provide buy-and-hold investors with the capital they require to keep building their portfolios.
For other investors, time is of the essence and immediate cash is required so that they can compete with cash-only offers found at real estate auctions or place an offer on a foreclosed property before someone else does. Hard money loans offer quick pre-qualification and fast access to capital, sometimes closing in days instead of a month or more. A hard money lender focuses on the project, plan and exit strategy as compared to a lenders credit or financial backing. They will also look to a track record or base knowledge of a rehabber, so be sure to come with your plan, budget and permits in place along with an analysis of property after repair value (ARV).
Hard money lenders provide residential and commercial mortgages on varying types of properties. These include warehouses, offices, industrial space as well as single and multi-family homes. A hard money loan is a short-term solution, typically 3 to 60 months that can be converted to a long-term loan when the time is right such as after rehab when the property has added value. Many investors are self-employed which puts up more barriers to traditional lending circles. A hard money lender can use bank statements or tax returns to qualify those that are faced with this obstacle.
Dennis Dahlberg Broker/RI/CEO
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.
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