Build Your Real Estate Portfolio Faster With Hard Money

How to build a real estate portfolio?

How do you become wealthy in real estate faster using hard money loans?  I’m going to tell you how the most successful real estate investors use hard money loans to build their real estate portfolios at lightning speed!

I was recently introduced to a real estate investor Natalie, her goal was to acquire 3 rental properties in 1 year. In the market that she’s looking to buy, it’s very competitive.

This means that unless she’s making cash offers, she won’t stand a chance at getting any good real estate deals. She has $300,000 of her own cash to work with. She’s looked at bank loans but banks would be too slow, she thought hard money loans were just too expensive.

So this ambitious real estate investor decided to try and purchase 3 properties without any loans, using only her $300K cash to buy ALL 3 of them.

But Natalie had a problem. The average price for a rental property in her target geographic area is around $200,000 per property.

To purchase 3 properties with an avg price of around $200,000 with all cash, it means Natalie will spend an avg of $600,000 combined.

So how will Natalie purchase 3 properties in her target geographic area, with only $300,000 cash?

Unless someone gifts her another $300,000, Natalie won’t be able to buy 3 rental properties in 1 year just using her own cash of $300K. Prices are just too high for the cash Natalie has available.

But Natalie did accomplish her goal of buying 3 rental properties in 1 year.

How? By using a funding source that is utilized by successful real estate investors. Natalie so quickly brushed off hard money loans as a funding source in the beginning because she thought they were “too expensive.”

By putting her own cash together with hard money loans, Natalie easily purchased 3 properties within a year. Using the leverage of hard money loans helped her scale faster and thus create more real estate wealth faster.

Natalie’s initial rejection of hard money loans came from her idea that these hard money loans were just too expensive. But what is the true cost of a lost opportunity in real estate because you were afraid to pay a higher interest rate?

A good deal in real estate that you could miss out on costs a lot more than a double digit interest rate. If your bank is offering you a really low interest rate but they can’t close quickly enough, how good is that bank loan? It’s worthless.

Hard Money Loan Terms

How To Build Real Estate Portfolio
build real estate portfolio with hard money

Hard money loans are such short term loans that you only pay interest for the time you hold the loan. Many real estate investors who use hard money loans to acquire rental properties, tend to pay them off with a traditional bank loan in 6 months or less. So if your interest rate on a hard money loan is 10% annually and you hold the loan for 6 months, it cost you 5% interest, not 10%. But regardless of the interest rate, no price can be set on a lost opportunity in real estate because you couldn’t act fast enough or because you didn’t have enough cash. Think about that.

Because hard money funds as fast as all cash, for Natalie it was the solution for her to achieve her desired real estate goals and build her real estate portfolio faster.

If you’re like Natalie and you have certain real estate goals but a limited amount of cash available then take a closer look at hard money loans. As I said, it is a funding tool used by successful real estate investors like Natalie.

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