So I'm trying to get a better grasp at the hard money lender options. I have almost 40k saved up and only way that I know is the conventional route. My realtor believes that I go this route as well even though I briefly explained to her about hard money lenders. I see a lot of investors even on social media talk about acquiring properties without a dime out of their own pockets and I want to follow that route as well! Are there really any disadvantages about using hard money lenders? Should I use a different realtor?
Looking forward to reading the feedback. Thank you so much!
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
5y
Joshua,
What is stopping you from using a QQ or Non-QM Loan? Usually people go the hard money route if they have bad credit under 600 or if they cannot show income. There are even other ways for both of those options...
Lender · Member since 2018 · 617 posts · 275 votes
5y
It should be noted that this is the exception, not the rule.
The biggest one is the cost of capital; you will pay significantly more using a HML than using traditional financing. For some investors, this cost can be worth it due to the (hopefully) increased speed and ease.