3 Reasons Hard Money Lenders Are Option for Investment Property
Why are hard money lenders a good financing option for investment property for rental or resale? Private money lenders, also called hard money lenders, or non-bank lenders are not under the same constraints as a bank or credit union when it comes to making loans. This brings me to the first reason why hard money lenders are a good option for financing investment property:
#1: Flexibility: Because private money, non-bank lenders don’t have to deal with as many federally imposed regulations, they have more flexibility in their requirements and criteria for loans.
#2: Speed: Real estate investors are using hard money lenders to finance purchases and refinances. While some banks are taking 30 days, 60 days, or even longer to give a final approval on investment property loans, hard money lenders are able to give an approval in a fraction of the time.
#3: Opportunity Cost: Hard money lenders charge higher interest rates versus conventional lenders. But when a good piece of real estate with income potential is at stake, real estate investors will pay the higher rates to avoid losing a property in the scuffle of a bidding war for example.
Particularly if you are a real estate investor working in a competitive market, being able to secure financing that is fast and flexible is crucial for success. If you’ve never looked into hard money lenders to finance your investment property, open yourself up to this option for financing. You may be glad you did. To take a look at some of our loan programs for investment properties, check out our loan programs here.