Real estate investing is an ultra-competitive business and any advantage that an investor can gain over the competition is greatly appreciated. Using commercial hard money loans to finance real estate purchases offers an investor some surprising benefits when making a purchase.
Fast loan approval and fast funding are two huge benefits of commercial hard money loans. But those two factors can influence other aspects of a commercial real estate purchase. The hard money application process is much faster and more efficient so that takes a lot of the stress off of the borrower during the negotiation for a property. They know that they will not be trying to compile a huge number of documents to submit to their lender. In addition, sellers look very favorably on an offer which includes commercial hard money funding. This is because of the fast approval and funding of the loans. It is also because banks have been known to pull financing from a borrower late in the application process and ruin many deals. And sellers are always happy to learn that they are going to be paid in all cash because the buyer is using a hard money lender. This can give the buyer a little bit more negotiating power to win a deal and get a great price.
Commercial real estate investors face many challenges when they are forced to use only traditional lenders. One fact is that you need to have great credit to get a large loan from a bank. But commercial hard money loans are much less dependent on credit scores and credit history so they are much easier to obtain. The main criteria for approval is that the collateral property hold a value greater than the loan. So investors rely much more on the value and quality of the property that they are purchasing and less on their personal credit. Hard money lenders are also more accepting of an investor who has just recently purchased another property and might be holding several commercial loans at the same time. Hard money lenders understand that making more purchases is the best way for an investor to make more money.
One of the greatest advantages of a hard money loan for a real estate investor is that the lenders tend to be very flexible. This can be seen in the less restrictive criteria to qualify for the loans as well as the size and other terms of the loans. This flexibility allows the real estate investors to be more creative and make more investments.
When you are working with a bank on a loan application you never know who you will talk to or if they will know you. You might apply for dozens of loans from a bank and have a new person to work with on each application. But when you establish a relationship with a hard money lender, you know who you will be working with on every deal. Having a hard money lender to rely on and work with on a regular basis will provide a real estate investor with a distinct advantage over other buyers.
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.