R.E. Buyers Eager to Take Advantage of Low Rates While They Last

While rates remain low, real estate buyers of single-family homes are rushing to take advantage. Hedge funds and foreign buyers have inundated markets like Phoenix and Las Vegas, making it harder for buyers in these markets to find desirable properties at a good price point. Although inventory all over the U.S. was tight in the first part of 2013, more people are taking the risk that the worst is over and have decided to list their homes. This has opened up more inventory in neighborhoods where homeowners have been waiting many years to list their homes to let the market recover.

For those buyers that don’t qualify for bank loans, there are alternatives for financing in the form of private money or hard money loans. However, the interest rates charged by private money and hard money lenders are high so are not favorable for long-term financing. Private money loans are meant to be used as a “bridge.” By the term “bridge,” I mean that these loans serve as a means to acquire real estate and then transition to a resale or refinance loan in a short amount of time.

Investor buyers, who cannot qualify for low interest rates at the bank, find that real estate loans made by private money lenders are their only alternative.  For example, for those real estate investors who are buying properties to rent, private money loans are the ideal loans for acquiring the properties quickly. If you’ve never used private money loans to finance your real estate acquisitions, learn more about these loans on our blog called, ‘Hard Money 101,’ by clicking here: