Real Estate Investors Use Hard Money Loans Instead of Bank Loans
Real estate investors have long used private money and hard money loans to accomplish their goals in real estate investing. Unfortunately, gone are the free days of lending between 2004 and 2006 when straw buyers were in abundant supply. In those days, if you could, “fog a mirror,” as the old saying goes, you could get a loan. But for real estate investors who find one good deal after another since the crisis hit, private money and hard money loans, have filled the gap where banks haven’t been lending.
They say that the memory of the market is the shortest memory of all. If this is the case in banking, will banks ever return to their credit spree of 2004 to 2006? Many believe that the big banks have learned their lesson and will never be as loose again. While skeptics believe we will see another ‘lending free for all’ in our lifetime.
Although most real estate investors would probably love it if they were able to qualify for low interest rate bank loans, the reality is that most banks still aren’t lending on investment properties. Even the most qualified borrowers cannot qualify in some cases. Savvy real estate investors have used hard money loans for years to accomplish their real estate investment goals. Good deals won’t wait for bank loans, and hard money is sometimes the only way for an investor to scoop up a property quickly. If hard money is a new topic for you, read our blog called ‘Hard Money 101’ to find out more. If you are a real estate investor who has never used hard money loans consider looking into it. You may be glad you did. Beware of fee collector lenders that are not really lenders at all but are just posing as lenders in order to collect upfront fees. There are a lot of these bogus lenders posing as real lenders in the private money lending. For more on popular lending scams and how to avoid them, read our post on this topic, “What is the Difference Between a Hard Money Lender and a Fee Collector.”
If you are ready to consider hard money loans for your next real estate investment, give us a call today or take a second to fill out our short, contact form at this link.
