"Hard Money Lenders - Who are They and What Do They Offer?"
What is a hard money lender? I have heard
the term in internet advertisements and by word of mouth,
but was not really sure what they were or how they work.
I looked into it a little bit and found that they are actually
just private individuals with a little extra money that
they make available for investment. They will lend the money
they have to real estate investors. The loan is usually
short term and is generally used by the real estate investors
to buy and repair certain properties.
So where does the name “hard money lender” come from then?
The term is a common one used in the financial world. Soft
money is money that has easy terms and a flexible payment
schedule. Hard money, on the other hand, has stricter terms
to it and the repayment schedule is rigid and completely
outlined by the loaner. With private financing, the hard
money term becomes even more harsh. The terms of a hard
money lender are usually very strict and rigid.
Those rigid terms will likely vary from hard money lender
to hard money lender. They will also likely be affected
by experience of the investor requesting. However, there
are some typical terms for hard money lenders. Usually the
loan will be for around half to three quarters of the value
of the home, post-repairs. The period is usually somewhere
between 6 ad 60 months and will charge you 2-10 points on
the loan as well. Again, though, there are going to be variations
from lender to lender.
Hard money lenders are actually a great resource for you
if you want to go into real estate investments. There are
a couple of reasons. First of all, they give you money on
hand so that you can make a purchase as soon as your offer
is accepted. In some cases, these lenders will even lend
you closing cost money. In addition, they are people, not
institutions. You can talk to them on a personal level and
build trust with them, which makes it something you can
really work with. You will be able to laugh with, talk with,
and even befriend your lender if you go the hard money lender
route. Keep that in mind as you enter the field, but never
forget that you do have a business relationship and that
a lot of money can often times be at stake.
Though not always easy to find because of their private
nature, hard money lenders can be a great resource for real
estate investors. They offer quick money without all of
the hassle of larger institutions. However, you must also
be aware that terms and conditions of hard money lenders
have little flexibility and are often tough. Because of
that, you must make sure you establish a solid relationship
and reputation with any hard money
lenders you choose to work through. However, find the
right one and you will have money available to you to make
your real estate investment experience a successful one.
If you would like to view more of my personal articles
on lending,
please visit my finance
site.
Article Source: http://EzineArticles.com/?expert=Christopher_Luck
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