Becoming a real estate investor is a great way to work independently, control your own hours and income and increase your earning potential. But the first hurdle to entering this field is a huge one which is impossible to overcome for many. Securing the money needed to make the first few purchases and completing the rehab projects can seem almost impossible unless you have a huge chunk of cash sitting in the bank. But Hard money loans in Colorado offer many people the opportunity they are looking for to get a few successful projects in their portfolio.
Hard money loans in Colorado are privately funded asset-based loans. That means that the approval for the loan is based on the value of the collateral being used to secure the loan rather than the borrower’s creditworthiness and debt to income ratio. And the fact that these loans are funded by private lenders means that there is far less paperwork involved and a much shorter turnaround time than a traditional loan. Both of those factors work in favor of the real estate investor who needs a simple application process, fast approval and even faster funding to secure a great property.
In addition, these loans offer new investors the opportunity to grow rather quickly. Traditional lenders are going to see that borrowers already have a loan on one property and are going to decline any other loan requests based solely on the debt to income ratio. But with Hard money loans in Colorado being based on the value of the collateral, it is much easier to carry multiple loans on multiple properties. Not only does this increase the size of your business but it also increases your earning potential. Nothing is worse than finding a great property but passing on the deal because you have not completed another project and can’t secure a loan from a traditional lender.
Hard money is not the perfect solution for everyone. These loans do charge a higher interest rate and can include more fees than traditional loans. So if you are on a really tight budget, then hard money could be too costly for you. And the shorter term of these loans can be challenging when you are new in the real estate business and are not as skilled at quickly completing each project and flipping the properties as fast as more experienced investors. And of course, there is the risk of losing the property if you default on the loan.
Hard money is an alternative that works for many real estate investors who take the time to learn the benefits and drawbacks to these asset-based loans. Having a good understanding of the terms and the potential risks is the only way to be sure that you are comfortable using hard money and that you understand and can meet your obligations as a borrower. But with a little research, you may determine that hard money is the tool that you need to begin a career in real estate investing.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.