Property market values continue to increase and it appears there is no shortage of buyers placing bids and driving up prices. If you’re wondering how you can compete with an abundance of investors seemingly flush with cash, consider looking into hard money loans for real estate. Commercial banks are required to follow unwavering regulations that set strict criteria regarding who qualifies for a mortgage loan. Private hard money lenders, however, are not required to adhere to the same rules; they may choose to fund whichever real estate opportunity offers a favorable return on investment.
Cash Can Make a Difference in Which Offers Are Accepted
Cash and speed set a serious real estate investor apart from other shoppers looking to buy an owner-occupied property. A seller is often more inclined to accept an all-cash offer from an investor so that he or she can pay off an existing mortgage and move on to the next property. Purchasers who have liquid funds readily available will begin to find sellers showing much greater interest in their offers. This could give you the upper hand when you’re negotiating a better price. With a hard money loan, you could apply for the funding you need to purchase a property and have the money wired to your account within a matter of days.
Equity Value Can Replace the Need for a Down Payment
Conventional mortgage loans often require a down payment of up to 20% of a property’s purchase price. A hard money loan differs in the sense that you may use a property’s current equity value as collateral. You could tap into a home’s equity to initiate your financing when borrowing from palm springs hard money lenders. This can be an attractive alternative to relying on an outlay of cash for a down payment. The immediate cash proceeds from your funding can go toward making repairs, refurbishing a property or purchasing another one.
Short-Term Strategies Can Lead to Long-Term Profitability
One of the benefits of using hard money loans is that you can use them as a short-term bridge loan; the cash can serve as an exit strategy from an existing property. Until you can sell a property, you may need its equity or sale proceeds to purchase another one. If, for example, you’re selling a property to finance the purchase of another one, a private lender could provide you with a short-term loan based on your current property’s equity value. The advantage you gain from using the funding as a bridge loan is that you’ll have the necessary cash to move on to your next real estate venture.
Financial Issues Can Be Resolved To Shorten Probate
Hard money loans can be used to settle probate matters quickly; having cash available allows an estate’s administrator to pay off debts and taxes so that heirs can move forward with receiving their inheritance. Based on the value of assets contained in a will, probate loans can help provide cash during a stressful situation.
Rather than applying for a conventional mortgage from a bank, contact a private money lender and explore your options to get the financing you deserve. You may not need to settle for a deal with a lower return when it’s time to close on a property with a profitable future.
