Hard money loans are underwritten to the After Repair Value, or ARV, which is the future worth once repairs are completed. That means you are sure to be provided with enough funds to buy the property and renovate it, without any money coming out of your own pocket. Hence, you will need a clear budget upfront and must not deviate from it.
Hard money lenders, unlike traditional banks, are not really worried about a borrower’s income or credit rating. The real estate itself will serve as the collateral for the loan, so they are more focused on the property’s current condition, the purchase price, and the value after restorations are made.
These loans typically have terms of 6 to 18 months tops, and interest rates between 12% and 18%. Usually, hard money lenders require monthly interest payments while the loan is still outstanding, some lenders; however, may let the interest accrue until the flip has been made and then require payment.
Probably the best part of using a hard money loan in Los Angeles to flip property is the lack of bureaucracy. Hard money lenders are not bound to strict rules and regulations regarding the condition of a home or commercial property like conventional lenders are.
That is because hard money lenders,many of which work with property-flipping investors,already expect to provide funding for properties in various stages of disrepair. Conversely, properties in poor condition do not satisfy the terms for the approval of a regular mortgage.
Instead, hard money loans are determined by the reliability of the investor and strength of the deal. Of course, they are also secured by the property, which means that if the resale value, vis a vis the purchase and restoration costs,makes good business sense, most hard money lenders in Los Angeles will approve the loan.
To Learn More About How Hard Money Lenders in Los Angeles Can Help Fund Your Next Project Contact PB Financial Group Today
If you are interested in purchasing real estate or need funding for your next project, you need to work with a reputable and respected hard money lender in Los Angeles. PB Financial Group is a premier direct hard money, private money, and bridge lender, who has been providing quick funding since 2006 and have funded over 2700 hard money/private money loans. Our objective is to work to satisfy your financing needs on important real estate projects throughout California in an efficient and effective manner.
To learn more about how to successfully finance your next real estate venture, please contact PB Financial Group, at 877.700.3707 to schedule a consultation or visit www.CalHardMoney.com to learn more.
PB Financial NMLS #357614/DRE #01522495
