Not every loan is perfect for every type of deal. But some specific deals are ideal for using Commercial Hard Money Lenders.
Commercial Hard Money Lender is not the best choice for the average consumer who is looking to purchase a home. In most cases, these borrowers have a decent to good credit, a reliable and verifiable income. They are planning to keep the house for many years. It only makes sense for these purchasers to use a traditional loan from a bank or mortgage company. And to save a little money with the lower fees and interest rate, but for more nontraditional deals, an alternative option like Commercial Hard Money Lenders is a great match.
Arizona Land Loanand Loans for construction can be complicated to secure from a bank or mortgage company.
The land does not work well as collateral because it has no structure or other improvements. Traditional lenders are going to shy away from Arizona Land Loansbecause it can be tough to recover their investment if the borrower defaults on the loan. Arizona Construction Loan present even more challenges because anything can happen when you are building a structure. There can be unexpected cost overruns, time delays for materials or adverse weather, or unforeseen issues with the site or construction process. All of these issues cost time and money. And they can also create financial problems for the borrower who could be forced to default on the loan. These types of Loans represent a higher level of risk that traditional lenders will not take, but a hard money lender will often fund these high-risk deals.
Time-sensitive deals can also be a challenge if you are using a traditional lender. The process of applying for a conventional loan often takes weeks. And then you are forced to wait weeks or even months to find out if the application is approved. This waiting game does not work when you are competing with other buyers on a Fix and Flip project or a property deal that is very desirable. While you are waiting for the bank’s approval, someone else is making the purchase with a loan secured from hard money lenders.
If you have no credit or have some challenges in your credit history, then you are not going to get a traditional mortgage. But hard money lenders are more interested in the values of the property than they are in your personal credit history. Hard money is also called asset-based lending because the loam request approval is based on the value of the property. Commercial Hard Money Lender will offer about 75 to 80% of the value of the property so that there is instant equity in the property. This process creates the security the lender needs in case you default on the loan, and he or she needs to sell the property to recover the original investment.
Just like any other financial investment or deal, hard money is a great choice when it is used correctly. For projects that are time-sensitive or are very unique, hard money is the way to go. And if you have credit issues, then hard money offers you an alternative to banks who will not approve your request. So for all of these deals, hard money is the right choice and a good investment.
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.