There are a number of ways investors can use to make money in real estate. As much as some do not require cash at all, the most profitable real estate ventures need short -term funding. Real estate trusts allow for passive investments, but some investors may also want direct ownership of property. In this case, hard money loans can be the best solution. Compared to traditional method of financing, hard money loans come with a number of advantages. Other than the speed and flexibility benefits, there are also a number of reasons why real estate investors opt for hard money loans in Los Angeles.
Hard money loan application process is a fast and simple process. In most cases, the borrower will only be required to fill the loan application form. A conditional approval can then be received after a few minutes conversation with the lender. This is contrary to the tens of pages that banks will need a borrower to fill for loan approvals. To make matters worse, it can take weeks, or even months for the banks to respond to the loan application. After the hard money loan is approved, it will only take the borrower a week or at most two weeks to receive the funds. Some lenders can even fund the money after only five days of approval.
It Makes the Deal Stronger
Real estate offers that have been financed with hard money are usually stronger. When a property attracts multiple buyers with bank loans to cater for, the buyer with hard money financing will always stand out from the rest.
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Being in partnership with a hard money lender is more than just a lender-borrower relationship. This is because your lender will also want your project to run smoothly for them to get their funds back in the shortest time possible. The most reputable hard money loan lender can analyze your project and give their opinion on issues that may not work on your behalf. This will help reduce cases of investing in non-profitable ventures.
Additional Financing when Conventional Banks Cannot Offer Additional Loans
Convectional banks restrict the amount that a single investor should borrow to only four times. But hard money lenders do not have such restrictions. Their main concern is mostly on the equity of a borrower on the invested property. Lenders can easily work with investors who have multiple propertiessince such borrowers are in a position to not only pay back the money, but within the shortest time too.
Hard moneyloans can be the best option for real estate investors who need urgent property funding. This can be the best alternative to a whole lot of processes and time taken to process loans in traditional banking systems. But it is also important to take into consideration the interest rate, loan terms and additional charges before getting in to an agreement with a hard money lender in Los Angeles.