Investment Property Loans

Defining A Hard Money Loan

Refinancing With Hard Money Lenders

A hard money loan is a type of short-term, secured loan that is used to finance real estate investments. Hard money loans are typically offered by private lenders or investment groups, rather than banks. They are often used by real estate investors who need cash quickly to purchase or renovate properties.

Hard money loans are characterized by their high interest rates and short repayment terms. Interest rates on hard money loans can be as high as 15% or more, and repayment terms are typically 12 months or less. These loans are also typically secured by the property being purchased or renovated.

There are several reasons why someone might choose to get a hard money loan. One reason is that hard money loans can be approved quickly. The approval process for a hard money loan is typically much shorter than the approval process for a traditional mortgage. This can be helpful for investors who need cash quickly to close a real estate deal.

Another reason why someone might choose to get a hard money loan is that they may not qualify for a traditional mortgage. Hard money lenders are often more lenient than traditional lenders when it comes to credit scores and debt-to-income ratios. This can make hard money loans a viable option for investors who have less-than-perfect credit.

However, there are also some drawbacks to hard money loans. The high interest rates and short repayment terms can make these loans very expensive. Additionally, if the borrower defaults on a hard money loan, the lender may be able to take possession of the property.

Overall, hard money loans can be a good option for investors who need cash quickly and who may not qualify for a traditional mortgage. However, it is important to be aware of the high interest rates and short repayment terms associated with these loans before taking one out.

Here are some of the pros and cons of hard money loans:

Pros:

  • Quick approval process
  • More lenient lending standards
  • Can be used to purchase or renovate properties

Cons:

  • High interest rates
  • Short repayment terms
  • Risk of foreclosure if the borrower defaults

If you are considering a hard money loan, it is important to weigh the pros and cons carefully before making a decision. You should also make sure that you understand the terms of the loan and the risks involved.

Phoenix Hard Money Real Estate Loans

If you’re interested in getting involved with real estate investing and need the capital to purchase properties hard money is a great way to get started.  Brad Loans has extensive experience in both real estate investing and hard money lending and is proud to offer Phoenix Valley real estate investors the financing they need.  It is easy to get started applying for hard money loan and Brad Loans is able to work with clients with bad credit and no credit. We are your source for hard money when traditional banks say no.  Read more about Brad Loan’s hard money loan programs or get started fill out our hard money loan application or give us a call to ask questions at 480-948-0880.

House Flipping Ideas

Using Hard Money Loans in Real Estate Investment in Phoenix, AZ

House Flipping Tips

When flipping a house you need everything to go as smoothly as possible. Here are some top tips to help you through the flipping process.

  • You need a good exit strategy and work out what you are going to pay for it and what you are going to do with the house once you have renovated it. A good plan is to purchase the house, have a contractor fix what needs repairing or renovating and then sell it.
  • You have to source the money for the property purchase. www.bradloans.com can help!
  • Work out the cost of your investment and for how long you will have to borrow money. If a house in your area on average takes 6 months to sell, go for 9 months.
  • It is best to find a house in an area where the property is selling rapidly. A good rule of thumb is to go for a house slightly below the current median home price. Remember, people are not always willing to buy in areas where there are a lot of renters.
  • Discover as early as you can how much repairing and updating the house will cost. A contractor can help here. Take notes on everything they say regarding costs.
  • Get ready to start as soon as the house has closed so time is not wasted
  • Develop a good relationship and contract with your contractor! Put everything in writing and be very detail oriented so everyone has the same expectations, milestones, and targets. Oh, and do not forget the penalty for not finishing on time!
  • Do not go over the top of making improvements to the house. It is an investment and you are not going to be residing there.
  • It is very important to finish the house on time and under your designated budget. Part of that is keeping people on their toes and making sure they are aware of the consequences (penalties) of not doing so.
  • Make sure the house is well staged and clean before display.
  • If the house is not selling at the price you want, most likely it is priced too high. People lose money all the time because they are not willing to lower their price.
  • Be open to negotiation. Sometimes it is best to barter on something relatively insignificant to secure the deal giving the buyer the feeling they got a deal.
  • Understand your holding costs. Every day the house does not sell is another day eating away at your profit.
  • Be prepared to make concessions to close the deal, especially if it is costing you money or being dragged out.
  • Follow up the title company to make sure everything is progressing in a timely manner.
  • Remember to cancel the utilities!
  • Once the process is over sit down and work out what went well and what needs improvement next time you flip a house.

 

 

Phoenix Hard Money Real Estate Loans

If you’re interested in getting involved with real estate investing and need the capital to purchase properties hard money is a great way to get started.  Brad Loans has extensive experience in both real estate investing and hard money lending and is proud to offer Phoenix Valley real estate investors the financing they need.  It is easy to get started applying for hard money loan and Brad Loans is able to work with clients with bad credit and no credit. We are your source for hard money when traditional banks say no.  Read more about Brad Loan’s hard money loan programs or get started fill out our hard money loan application or give us a call to ask questions at 480-948-0880.

Avoid Defaulting On A Hard Money Loan

HArd Money Loans, COVID-19, Arizona

Residential Hard Money Lending

The source of hard money is private individuals who want high interest returns on their cash loans. Investors utilize these loans to purchase properties that banks do not normally offer loans on. The loans often carry interest rates in excess of twelve percent, however.

Loan Structure

The entire property is used by hard money lenders as collateral. Usually only sixty to seventy perent of the after rapair value of the property us covered by the hard money loan. The borrower would come up with the balance.

Terms

With interest rates ranging from twelve to eighteen percent, these loans are high interest but over fifteen to thirty years still have a baloon paument usually after the first or second year. At just 6 percent interest the montly payment over 30 years on a $100k loan is just $599.55 but trade that for a an interest rate of fifteen percent andit cleaps to $1,264,44. You can also expect  to pay between two and four points on the loan as well.

Default

Hard-money loan contracts typically contain a default interest rate clause that significantly raises the interest rate in case of default. For example, the rate may jump from 15 percent to 29 percent in some states, sending the monthly payment from $1,264.44 to $2,417.11, which could make it impossible for a small-business owner to cure the deficiency.

Foreclosure

Hard-money lenders are quick to foreclose when the borrower fails to cure the loan. Since the entire property was used as collateral, any portion of the loan amount that was paid back is forfeit. For example, if a business owner paid back $50,000 of a $65,000 loan, he lost the entire $50,000 paid.

Deed In Lieu

Hard-money lenders can offer a deed in lieu of foreclosure, which allows the borrower to give back the property and avoid foreclosure. The advantage is that no foreclosure appears on the business owner’s credit report or in the public records that would negatively affect her ability to get future loans. Business owners must be sure the lender will agree to sign a release of lien at the same time. Otherwise, the borrower remains responsible for paying back the loan even though the property was given back to the lender.

Source: https://smallbusiness.chron.com/happens-default-hardmoney-loan-61461.html

Phoenix Hard Money Real Estate Loans

If you’re interested in getting involved with real estate investing and need the capital to purchase properties hard money is a great way to get started.  Brad Loans has extensive experience in both real estate investing and hard money lending and is proud to offer Phoenix Valley real estate investors the financing they need.  It is easy to get started applying for hard money loan and Brad Loans is able to work with clients with bad credit and no credit. We are your source for hard money when traditional banks say no.  Read more about Brad Loan’s hard money loan programs or get started fill out our hard money loan application or give us a call to ask questions at 480-948-0880.

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