Your Guide to Hard Money Lending
At Hard Money Lenders, we understand that hard money loans can be confusing and intimidating to new investors. But, as daunting as they may be, hard money loans are invaluable tools for investors looking to purchase fix-and-flip properties, short-term investments, or multiple properties in a short period of time. There are innumerable advantages to pursuing a hard money loan as an investor, especially in a hot market such as Miami, Florida. It’s worth it to take some time and educate yourself on hard money loans, and that’s why we’ve prepared this guide on hard money lending for you! In addition to this article, we’ve also prepared a whole cache of useful articles that investors can use to educate themselves about hard money and real estate investing here.
What is a Hard Money Loan?
A Hard Money Loan is a loan given out by hard money lenders. Hard money loans typically have short terms of 1-3 years, a speedy approval process based on collateral, flexible loan terms, and a higher interest rate than conventional loans. In addition, there are a few more nuances between hard money and “soft money” loans that can be found here!
Why is it Called a “Hard Money” Loan?
Hard Money loans are called “hard money” because they’re funded by private investors instead of traditional banks or lenders. Another reason they’re called “hard” is because the loans are backed by real estate as collateral. Hard Money loans differ from conventional loans because the lender is interested in using your property as collateral once you purchase it. If you are unable to pay back your loan, the property will be seized as collateral.
Advantages of Hard Money Loans
Hard money loans often offer a much speedier approval than conventional loans. Hard money loans can be a great option for investors that don’t have time to wait around for money to hit their account for a real estate investment in a hot market like Miami, Florida. The numerous benefits of real estate ownership have brought about a hot market, and speedy closing can be the difference between securing a deal and getting it stolen from under you.
In addition, hard money lenders are often more flexible and understanding of your unique needs. Hard money loans are funded by private investors who don’t need to adhere to the strict lending policies that large institutions often have. Hard money lenders are sometimes able to make adjustments to the terms of a loan to fit your unique investment needs.
Finally, hard money lenders are more likely to approve your loan when compared to conventional lenders. Hard money lenders use the property you buy as collateral for the loan, so they are less concerned about things like employment and credit history. Conventional lenders will scrutinize things like credit history, employment history, and other factors that many people don’t have solid evidence of. This makes hard money lending a great option for those who are self-employed or foreign nationals.
Uses for Hard Money Loans
Hard money loans are great options for investors looking to pursue fix-and-flip projects or other short term real estate investments. The advantages of hard money loans, including their short duration, flexible terms, and easy approval process, make them an attractive option for real estate investors around the country. Hard money loans see a lot of use in hot markets such as Miami, Florida as well!
Even if you’re not looking to make an investment, hard money loans still have many wonderful use cases. For example, if you’re a foreign national, you may not have the credit or income history needed for a conventional mortgage. In this case, hard money lenders can use your current assets and the home you want to buy as collateral in exchange for a loan. That way, you can still purchase a home without a substantial US employment or credit history! This is just one of many ways that the advantages of hard money loans can be utilized for specialized use cases.
Where Can I Get a Hard Money Loan?
At Hard Money Lenders, we offer hard money loans for Florida based real estate projects. We are among the top hard money lenders in Miami, Florida and the surrounding area. If you’re not based in Florida, we’ve also prepared a hard money lender directory so you can find the right fit!
We specialize in helping foreign nationals and investors with purchases that conventional lenders won’t deal with. If you’re based in Florida, we’ll sit down with you to inspect your business plan and investment opportunity. If the deal makes sense, we can move forward with one of our loan programs, or prepare a custom-made one! We deal with the following investments:
- Single Family Fix-and-Flips
- Multifamily Fix-and-Flips
- Commercial, Industrial, Office Properties
- Construction and Land Leases
- …And More!
Contact Hard Money Lenders and get started on your loan application today.
Adam Smith has spent the last 5 years in the Private Money Lending world helping real estate investors secure financing for their non-owner occupied real estate investments. When he’s not thinking about real estate, Adam is an avid Jazz music fan and fisherman.