Hard money loan; did you just frown? You are not alone since, for long, hard money loans haven’t had the best reputation, especially for beginners. Ask anyone, and they won’t hesitate to provide a long list showing how shady the hard money loans are, though most, if not all, of the answers, aren’t based on experience. The industry has significantly evolved from dark alley deals to legal agreements, with clear rules and regulations governing the hard money lenders. Today, you can access hard money loans for Houston real estate without worrying that the lender will change the terms later to gain the upper hand.
Hard money loans continue to appeal to a range of users, more so in the real estate industry, including:
Business enterprises:
Business owners who want to finance a commercial real estate deal but can’t qualify for traditional financing, at least not fast enough to close the transaction, turn to the loan.
Rental property investors:
Hard money provides quick cash, a source of funding that helps investors grab great deals before slipping off their fingers.
Property flippers:
House flipping is a great real estate investment strategy. This means buying fixer-uppers, doing some rehabs, and selling at a high price. Traditional loans hardly provide the financial injection needed for acquisition and property rehab. With hard money loans, you can get enough to cover the purchase price and repairs, making the quest more manageable.
So, what is it about the hard money loans for Houston real estate that keeps winning more hearts? Here is a glance at the top advantages that more users continue to realize, driving them into hard money over traditional loans.
No! That’s hardly the answer
How many banks or nationalized firms have you tried and got a no? A no is a common answer from the traditional lending institutions since they have to establish your financial situation, consider the property’s appraisal value, and calculate how much they would lend to you. They then go through a process with more procedures to grant you the loan. You can always expect a no if something goes wrong or is not to their expectations and lengthy rules in place.
Aren’t you tired of the no and how many great properties they have cost you? Turning to hard money loans opens a new window of opportunity to grab those hot deals. The lenders aren’t that much interested in your financial track record. They consider the property and keep it as collateral. Provided the property’s value is equivalent to the loan amount you need, you can almost always expect a YES. If you are struggling to build a profitable real estate portfolio due to capital constraints after your loan request was met with a strict NO, hard money could be all you need to get out of the jam.
Time is money
If there was an industry befitting of the phrase, it is real estate. Great deals don’t wait, not to mention how fast the prices fluctuate. The competitive market requires you to act fast if you are to land any property with great potential. While amassing huge capital gives you an edge, you don’t have to shy away from such properties when your financial might is not up there. Traditional lenders take long to approve your loan request and avail the funds, averaging 30 days or more. Such a wait can cost you amazing property deals. You can considerably shorten the wait by opting for hard money loans for Houston real estate.
Within 3-5 business days, you can close the deal and access the funds you need to buy a property. Such processing and closing speed mean properties won’t keep slipping off your fingers following frustrating waits. You have sharpened your skills and can easily find the best properties before anyone else, and with hard money loans, you can enjoy as much edge with your finances, allowing you to lad the best real estate deals.
Hassle-free is the way
Would you rather spend half, if not the whole day, preparing for a loan application or keeping an eye out on potential deals? Collecting all the required documents for a traditional loan application and ensuring they are accurately filed and submitted can be quite a headache. From the bank statements, income documentation, and tax returns, to mention a few requirements, the process can be draining. By the end of the day, keeping track can be challenging, and you might learn that you didn’t provide all the documents, further dragging the application process.
Sure, the low-interest rates and other fees are irresistible, but wouldn’t you be willing to pay a little more for convenience? Convenience comes at a slightly higher price in every setting, and hard money loans are no exception. You bypass a lot since the process is not lengthy, and you can access the funds within a short period. The cost is higher interest rates but considers how much you will realize. You take the hassles out of the equation and, with almost guaranteed yes and quick funds access, get a chance to keep your progress on track.
Flexibility
Once you take a traditional loan to finance a property purchase, you hardly get the flexibility to get more unless you sell it or fully finance the current engagement. This means your flexibility to pursue more opportunities is limited. With hard money loans for Houston real estate, your buy and sell quests flexibility allow you to pocket more profit.
Even when on an active engagement, you can still access more funds to make an acquisition, helping you build on property volume. Once you find the best hard money lender, financial constraints won’t stand in your way. Your quest to develop a solid real estate portfolio just got a little easier; you only need a keen eye to spot the best deals.
As a beginner, you might shy away from hard money loans for Houston real estate based on what you’ve heard over the years. Sure, the interest rate is higher, loan terms aren’t as extensive, and you might need to raise a little more down payment, but aren’t the benefits worth a lot more? Partnering with hard money lenders in your real estate investment quests can turn your progress around in more than financial considerations. You can build a solid support system, making navigating the competitive real estate industry easier.