Enhance Your Real Estate Equity And Investment Portfolio
Thursday, October 12, 2006
Investing in real estate is one of the most common ways hard money funds are utilized. It makes sense, considering that real estate investing is a cash intensive activity. Oftentimes, investors need more operating capital than conventional lending institutions are willing to supply, especially on short notice.
Hard money can indeed be a deal saver when conventional financing takes longer than expected, or isn’t available for some reason. It’s a fact that your FICO score can take a nosedive if you invest in a lot of property, simply because of the number of mortgages you’ve taken on. On the other hand, property that is available for a reasonable price may not meet conventional banking standards. Whatever the case may be, hard money lenders are not constrained like banks or other mainstream institutions are.
Hard money lenders have to be nimble, flexible, and creative. Conventional lenders can take up to six months to fund mortgages for real estate investing, whereas hard money lenders can fund in two weeks or less from the time you begin.
Hard money lenders also have an advantage, in that they can fund projects that banks cannot. If you’re interested in investing in a golf course, airport, or amusement park, conventional banks probably won’t help you. Hard money lenders can, and will.
Hard money is best used as a bridge loan. Terms usually range from one to three years, providing ample time to prepare the property or your personal financial status to get long-term conventional financing, or to sell the property outright.
Hard money can indeed be a deal saver when conventional financing takes longer than expected, or isn’t available for some reason. It’s a fact that your FICO score can take a nosedive if you invest in a lot of property, simply because of the number of mortgages you’ve taken on. On the other hand, property that is available for a reasonable price may not meet conventional banking standards. Whatever the case may be, hard money lenders are not constrained like banks or other mainstream institutions are.
Hard money lenders have to be nimble, flexible, and creative. Conventional lenders can take up to six months to fund mortgages for real estate investing, whereas hard money lenders can fund in two weeks or less from the time you begin.
Hard money lenders also have an advantage, in that they can fund projects that banks cannot. If you’re interested in investing in a golf course, airport, or amusement park, conventional banks probably won’t help you. Hard money lenders can, and will.
Hard money is best used as a bridge loan. Terms usually range from one to three years, providing ample time to prepare the property or your personal financial status to get long-term conventional financing, or to sell the property outright.
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