What exactly are hard money lenders?
- The majority of real estate investors hear a number of terms they don’t understand when they first start out in the business. One of these terms is hard money.
- A hard money lender is usually a private person or group that provides loans based on the property that is being purchased, rather than on a buyer’s credit rating.
- In most cases, these loans will cost much more than the typical mortgage. In fact, some are as much as double what regular mortgage costs are and are higher than normal origination fees. Despite this fact, however, many keen real estate developers are able to turn these loans over fast enough to make a greater profit than on many traditional investments.
Who Uses Hard Money Lenders?
- House flippers and developers are the most common people who use the services of a hard money lender. This is because they are often able to borrow as much as 100 percent of the total purchase price.
- Many of these lenders will need you to back up the loan with some type of assets.
- If you are confident you can purchase a piece of property and then quickly turn it around for a tidy profit, and you are unable to get a traditional mortgage, then this may be your best option to consider.
- There are some real estate investors who use these kind of loans to get the property, fix up a few things to increase the property’s value, and then acquire a new loan from the bank to pay off the original lender.
- There are also individuals that need cash out from their real-estate property. Not every private lender allows this. GL&L Holdings does and we can certainly do so if you have an investment property that is either paid for or has sufficient equity for the cash out to occur.
When a hard money lender finances a property, it helps to reduce all the red tape that typically goes along with purchasing a house or other property with a traditional loan.
Benefits of Hard Money Loans
- The biggest benefit and the most appealing factor of the hard money loan are that it is not usually based on your credit score or credit worthiness.
- The funding is available (in somecases) in 5-15 days, and you will be able to acquire a loan based primarily on the property you are trying to purchase.
- In most cases, you will not have to deal with a processing team either but rather an individual lender. If they say yes to you borrowing the money, then they approved your loan. This is extremely beneficial when compared to the usual loan process of going through the loan committee and then underwriting.
Contact GL&L Holdings Today
So is using a hard money lender right for you?
It really depends on your plans. However, if you want an easy process to get the money you need for a real estate purchase investment, then a hard money loan may be just what you have been looking for.
Hard money lenders will each have a different set of requirements and protocol. There are some that charge less, while others charge more.
If you want to learn more about hard money loans, contact GL&L Holdings today!
Call us at (832) 770-9415 to speak with a one of our staff member to get all of your questions answered. You can also visit our website @ www.gllholdings.com