In the real estate industry, the profits can be lucrative, but first you have to get started. Because real estate is a physical asset for which you have to pay if you want it to be really paying off. It’s actually the first lesson for the beginners who are not with big pockets but trying their hands in real estate market.
Well, the bevy of financing tools like- bank loans, the line of credit, hard loans, private money loans and commercial loans is available that help in closing the deals without needing a lot of cash. However, all the tools won’t provide the reliability of getting a loan.
For instance, Bob Hope said, “A bank is a place that will lend you money if you can prove that you don’t need it.”
Don’t take my word for it. It’s been said so due to the numerous hassles involved in the bank loan that you might have also experienced from document requirements to the income verification.
That’s where HARD MONEY LOANS rocks, which are easier to obtain as opposed to conventional loan options. It’s true, let’s see how:
Financial background Is Less IMportant
Hard money loans are the primary type of mortgage loans wherein the loans are availed to the real estate investors against the property. The borrowers’ job, credit score, and income are not verified because the hard loans are provided sensing the liquidity and benefits in the property.
Real estate experience and history are much less important
Unlike the banks, real estate private money lenders won’t have any interest in assessing how much experience the borrower has in buying and selling of the properties. Besides, even the bad case of loan repayment won’t influence the lenders, which sometimes happens in conventional loans. Also, no guarantee or assurance of someone else is needed, which is a positive point for the newbie real estate investors.
Get Loan Approval in Days, not Months
Certainly, the real estate deals are the deals of the days that may get out of the hands, if any delay is made. But, without having cash or guarantee of a loan, the investor cannot lock the deal. Here, hard loans are a panacea. Just in a meeting of the borrower and lender, the loan for the real estate project can be approved.
Real estate hard money lenders are around you
The real estate beginners don’t have a big network that helps them to connect with the right prospect so that they can easily get the funds for the property. For hard money loans, the investors don’t need to do a lot of research or need to have the big networks as the hard money lenders can be easily found in the directories, in the commercial ads where they generally advertise or in the primary circle of family and friends.
How easy has it become to get the finance? Isn’t it? Excited to get the hard money loans for your next deal? If so, you need to show some diligence in preparing a hard money loan request before meeting any hard money lender.
In a nutshell, all the components that need to be a part of a loan proposal package are enlisted so that you don’t require to make a second trip to the lender. Here, they are:
- Create presentation letter: It works as a loan application where the borrower can include the credit details, ID proof, resume, and the real estate experience (If any). Also, keep the physical photos of the property from inside and out.
- Title work: Elaborate about the property history and transfer of title for security when buying the property.
- Hazard insurance: It assures the lender that if the loan repayment is not done, then they can at least get the property insurance coverage you had taken.
- Prepare repair estimate: It adds credibility to the proposal if you include the detail list of repairs that’s needed after buying the property.
- Tentative profit calculation: Showcase a rough picture of the benefits that you will get after buying the property, repairing, realtor’s fee and then reselling it.
The hard money real estates loans have different parameters to provide funds for the property, which is advantageous for the real estate rookies. When the novice players approach the hard money lender with well-prepared documents and proposal, it creates a different impact and the probability of finance in the first meet becomes plausible. Get set for hard money loans!