Funding for slippers
Sometimes a good investment is not waiting. You can buy a nasty but loud house with a few simple repairs and a quick turn to 25 percent profit. These options do not come every day. But they compete with cash buyers! How do experienced investors quickly buy all the money? – Hard money.
What is Hard Money?
The so-called “hard money” comes from private lenders, people or people who spend money on short-term borrowing. Many believe that these loans are only for non-primary borrowers, for those who cannot afford to finance them with significant resources. But this is not true.
The largest user of this type of financing is real estate investors. There may be a credit line available to buy apartments at the auction. Or, first pay cash, then refinance to repay your money to restore the property or buy more.
How fast can a hard money loan fund be?
Hard cash loans usually last for a few weeks, but can only be financed for three to five days. Customer credit history is usually insignificant and revenue is not justified.
While government-controlled mortgage lenders cannot lend without revenue, private creditors do not have to comply with the same consumer protection laws. So you should exercise more cautiously. However, it saves less time.
Why is it hard to earn money?
Hard money is not for everyone (or even for most people). This, however, allows the purchase of non-funded properties. Fixed and flip or rehabilitation transactions, construction and land and commercial properties may require alternative financing.
In addition, not everyone can meet the general policy of lending or lending to traditional mortgage lenders.
How much does a fast private loan cost?
Private creditors generally do not have long-term financing. They are often based on the assumption that the borrower will be default and must make sure that it is protected.
This means that a small portion of the property’s value (50-75 percent) can be borrowed and the price is steep – the $ 300,000 creditor can cost $ 15,000. And you are expected to pay higher interest. Depending on the loan, this may be 3 to 10 percent higher than normal primary loans.
For these reasons, the only reason why a large investment is needed is a quick response. If you pay 10% of the loan amount for interest and loan costs, but you can make 25% of the transaction in weeks or months, you can pay more for quick financing.