As U.S. banks push to comply with new international banking standards by as early as 2015, we are seeing a rise in demand for commercial hard money loans. Particularly in the area of commercial lending, banks are already beginning to slow down lending to be able to comply with the Basel III by as soon as 2015.
In fact, commercial real estate investors biggest complaint is about not being able to find commercial financing. Ever since the new standards were finalized in January of this year, US banks have begun to deleverage their balance sheets and carefully choose which commercial loans to do. For this reason commercial hard money loans will continue to see a strong growth in demand through 2015.
But many commercial real estate investors have never dabbled in commercial hard money loans, also called bridge loans. Many of them don’t understand the requirements or the characteristics of commercial hard money loans versus bank loans. For this reason, we have an active blog on this topic and a page dedicated to article and videos that educate newbie on the topic of commercial hard money loans. We invite those not familiar with concepts and terms in private money to visit our ‘Hard Money 101’ Blog found at this link: http://privatemoneyutah.com/hard-money-101/
Or to learn more about commercial hard money loans here: http://privatemoneyutah.com/loan-programs/
Investment real estate loans are used by real estate investors to purchase distressed real estate assets, to buy and fix up rehab properties, or to refinance existing investment properties. Since stated income loans disappeared in 2008, investment real estate loans have been a good alternative for stated income borrowers who don’t claim a lot of income. Particularly for real estate investors who have sporadic income throughout the year, the disappearance of stated income loans has created a void that investment loans for real estate has filled.
In 2008, stated income loans disappeared. They were blamed for the havoc that was wreaked in the real estate bubble when unqualified borrowers were stating income high enough to support large real estate purchases. When the wheels fell off the cart in 2008, almost every U.S. bank stopped offering stated income loans altogether. The demand for investment real estate loans didn’t decrease after 2008, but instead it increased tremendously. With stated income loans fueling most investment purchases and refinances prior to the crisis, real estate investors needed an alternative to stated income loans. This is where investment real estate loans began to really take off.
Most investment real estate loans these days are coming from private money lenders, also known as hard money lenders or bridge lenders. In answer to the increase in demand after 2008, private money lenders have begun to offer a competitive investment real estate loan that meets the short-term needs of real estate investors. Although investment real estate loans may have higher interest rates than bank loans, the biggest advantage of these loans is that they fund quickly with not a lot of drama. This has helped real estate investors take advantage of fleeting opportunities in real estate where hundreds of eager buyers may be standing by to pounce. Because many banks cannot act as fast as a private money lender, investment real estate loans have become the top choice among real estate investors in recent years.
Until stated income loans come back under the loan programs offered by U.S. banks, real estate investors will continue to seek out investment real estate loans to replace them. Private money lenders, like us, can provide these types of loans so look no more. To learn more about our investment loans for real estate, click here: http://privatemoneyutah.com/loan-programs/
Utah real estate investors that focus on rehabs are continuously on the search for new hard money lenders in Utah. This is a State where nearly every hard money lender has the same loan programs as all of the rest of the hard money lenders in Utah. Most of these hard money lenders in Utah don’t have a special rehab program for real estate investors that focus on rehabs versus investing in buy and hold investment properties. Until now.
Our loan program for real estate rehab investors is like no other. We offer loan amounts up to 95% of the purchase price if the after repaired value of the property is sufficient. 12% interest only, and 3 points as a loan fee is also typical for a 9 month term with no prepayment penalty. This type of rehab program is perfect for real estate investors that specialize on investment rehabs and is the first of its kind in Utah. Most hard money lenders in Utah will lend between 65% and 75% of the purchase price on a rehab investment. This makes it tough for real estate investors who need to free up their cash to use for repairs.
To learn more about our real estate loans for rehab, investment property purchases, click here: http://privatemoneyutah.com/rehab-loan-program/
Real estate investor loans are typically based on the asset being used for collateral and not the ability of the borrower to repay the loan. In other words, real estate loans for investors are not necessarily scrutinized in the same way as a bank loan is. For this reason, many real estate lenders are concerned with the value of the property and its characteristics over the income and credit of the borrower. This is good news for real estate investors who have had hits to their credit scores in recent years. Particularly for those who have bankruptcies or foreclosures lurking in their pasts.
Other than the banks, who is offering real estate loans for investors? Private money lenders, also called “hard money” lenders, or “bridge” lenders, are the top sources of real estate loans for investors. Although the interest rates charged by these private money lenders are much higher than bank rates, real estate investors use these loans as tools to achieve their goals.
For example, a real estate investor makes offers on 8 properties to purchase. Of all 8 offers made, the real estate investor is able to get 3 accepted offers. Unless this investor has a large bank account, taking down all 3 properties simultaneously could be difficult. This investor would take out a private money loan against all 3 properties to make his or her own cash go further across the 3 acquisitions. These loans are a valuable tool which will allow this real estate investor to take advantage of multiple opportunities simultaneously. And most important, it doesn’t matter if this investor has bad credit or no credit, he or she is still eligible for a real estate loan from a private money lender. As long the 3 properties are valuable, in good neighborhoods, etc., there will be no problem obtaining a real estate loan to purchase them.
If you’ve never looked into real estate loans for investors, take a look at some of our loan programs here by clicking here: http://privatemoneyutah.com/loan-programs/