Investment Property Loans

If your business does not qualify for a traditional business loan but you are needing funding. a hard money loan may be an option open to you as they are an alternative, non-traditional source of small business financing. Read on to learn more.

What Are Hard Money Loans?

Hard money loans are short term loans that are secured by real estate. They are often funded by private investors instead of conventional lenders like credit unions or banks. The terms are for about 12 months but they may be extended to 2 to 5 years. The loan does require monthly payments of interest or some principal and interest with a balloon payment at the end of the loan. The amount that you can borrow is based on the value of the property. The property has to be one that you already own and wishes to use as collateral or it could be the property that you are trying to buy. Hard money lenders are mainly worried about the property value instead of your credit, although credit scores are still important to lenders. Those who can’t get a conventional loan because of a short sale or foreclosure can get a hard money loan if they have plenty of equity in the property being used. When a bank says no, a hard money lender may say yes.

Interest Rates and Points For a Hard Money Loan

The financing costs and focuses charged by hard money loan specialists will shift from bank to moneylender and will likewise fluctuate from district to locale. For instance, hard money loan specialists in California by and large have bring down rates than different parts of the nation since California has numerous hard money loaning firms. Expanded rivalry prompts an abatement in costs. Hard money moneylenders go out on a limb with their loans contrasted with an ordinary bank advance. Because of this higher hazard required on a hard money loan, the financing costs for a hard money advance will be higher than typical mortgages. Financing costs for hard money advances extend from 10 – 15% relying upon the particular moneylender and the apparent danger of the loan. Focuses can go somewhere in the range of 2 – 4% of the aggregate sum loaned. The financing costs and focuses may shift significantly contingent upon the loan to esteem proportion.

Hard Money Loan to Value Ratios

The credit sum the hard cash bank can loan is controlled by the proportion of advance sum isolated by the estimation of property. This is known as the credit to esteem (LTV). Numerous hard cash moneylenders will loan up to 65 – 75% of the present estimation of the property. A few loan specialists will loan in light of the after repair esteem (ARV) which is the evaluated estimation of the property after the borrower has enhanced the property. This makes a less secure credit from the hard cash moneylender’s point of view, in light of the fact that the measure of capital put in by the loan specialist increments and the measure of capital contributed by the borrower diminishes. This expanded hazard will make the hard cash loan specialist charge a higher financing cost. There are some hard cash loan specialists who will loan a high level of the ARV and will even back the recovery costs. This may sound incredible from the borrower’s perspective in the first place, however these sorts of credits have a substantially higher hazard included and the loan fee and focuses will be MUCH higher. Expect 15 – 18% intrigue and 5 – 6 focuses when a bank finances an advance with practically zero up front installment from the borrower. Sometimes, it might be advantageous for the borrower to pay these over the top rates with a specific end goal to secure the arrangement in the event that they can in any case produce benefit from the venture.

Borrower Requirements for Hard Money Loans

As talked about before, hard cash moneylenders are principally worried about the measure of value the borrower has put resources into the property that will be utilized as guarantee. They are less worried about the borrower’s FICO score. Issues on a borrower’s record, for example, an abandonment or short deal can be disregarded if the borrower has the money to pay the enthusiasm on the advance. The hard cash loan specialist should likewise consider the borrower’s arrangement for the property. The borrower must present a sensible arrangement that shows how they plan to at last result the credit. Generally, this is enhancing the property and offering it or acquiring long haul financing later on.

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.

Hard money loans are a type of loan that is usually not issued by a bank but by a private money source. Hard money loans can be very helpful in short term investments or real estate endeavours. They are usually know for their fast funding, higher interest rates and no hassle quick loan approvals. If the interest rates are higher, you would think people would not want to get a hard money loan right? That’s false, below are 6 reasons to use hard money loans when you can’t get financing from bank or other lenders.

Hard Money Loan Uses Include:

1. Ultra Fast Funding: Sometimes the perfect real estate opportunity comes up at the drop of a dime and you don’t have time to wait for a bank loan. When bidding on a property you are going to need either cash or hard money lending in place of that cash. You don’t want to miss a profitable opportunity when it comes.
2. Fix & Flip or Rehab Properties: Banks usually wont fund fix and flip or rehab properties because they pose too much risk. Often the most profitable real estate opportunities require repairs, cosmetic rehab and past due maintenance. The only way to make these costly repairs quickly and easily is to either have the cash or be funded by a hard money or private money lender.
3. No Credit or Bad Credit: Do you have no credit or bad credit and want a traditional bank loan? Good luck! Banks don’t want to lend you money unless you have some already to cover the loan just in case you can’t pay it back. Now, if you had the money you would of already funded the project yourself right? Of course you would but you don’t and that why hard money lenders are your saving grace! The don’t care about credit as long as you have equity or collateral for the loan. Even people with a bankruptcy or foreclosure on their credit history can still get hard money loans.
4. Construction Loans: Whether you’re a home owner or contractor and planning on building your dream home, building a four plex, borrowing to finish and unfinished home, remodeling your existing home or building a 5 spec home, hard money loans can help at any stage of construction to help you get these projects completed when bank won’t fund your construction loan.
5. Unable to Get Traditional Bank Loans: Traditional lenders have very tough criteria to meet in order to receive a loan. Traditional banks usually won’t offer loans for: People with bad or no credit, fix and flip opportunities, finishing or building new construction or buying or purchasing land. Hard money lenders will fund all of these endeavors and more.
6. Land Loans: There are many different forms of land including Raw Land, Developed Land and more. From a single lot of land to a subdivision. If your land is surrounded by commercial buildings or other houses you will find a hard money lender much easier. This will give the Land lender good insight about the value of the property.

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.