LET'S TALK HARD MONEY LOANS

Ever wonder how investors finance multiple properties simultaneously? Well, today, I will explain one loan method used by investors to finance their deals. "Hard money" is a term used in real estate. This type of loan is secured by an asset and gave it the underlying term "asset-base-loan"; Hard money lenders are not banks but companies and individuals that allow investors to borrow money.

These loans use the property as collateral, while banks consider credit score, finance history, and the ability to repay the money. As mentioned before, hard money loans are contributed by individuals and companies, for a faster and less rigorous process. Lenders take a higher risk due to their efficiency. Therefore their repayment period is shorter than a traditional loan, the down payment is larger, and interest rates are higher. Yet, there is a faster approval process, approvals are based on property, not credit score, and there is more flexibility when acquiring a hard money loan.

Lenders fund quickly, as mentioned, so it's necessary to be well prepared when asking for money. Lenders are focus on returns, so approach with the following. Proof of income, No one will lend you money if they don't think they will get their money back, so get all financial information ready. Payment strategy, include a detailed plan that illustrated when funds are returning. If you have a portfolio, use it as a resume to highlight all past experiences. If you don't, make a specific strategy for the property you are trying to fund. Make sure you have a team of experts that will back up your plan of action. The more, the merrier!

Always do your research before stepping into something. Make sure the lender you are working with is reputable, local, and affordable. Local lenders may offer the best possible term, but the best way to find a lender is from a trusted source.

So if you are looking for another route to finance your investment, a hard money loan may be the option for you. Outweigh all the pros and cons, be well prepared, and you might end up with a long-term relationship.

If you have any further questions or would like to share your experience on the topic, don't hesitate to connect with me here on BP. I'd be happy to help you on your journey.

Goodluck.