Using Hard Money Loans to Fix and Flip Homes
There are many ways you can invest in the real estate market. In recent years, one of the most popular options is to purchase homes to renovate and then flip them for a profit. Not only does this provide investors with a great way to earn extra money, but it also gives individuals better housing options. However, funding these ventures can be difficult, especially if you rely on traditional lending methods. The good news is there are other options out there. Hard money lending is a viable option that can make this type of real estate investing an option for more individuals.
A Faster Turnaround
The best way to make the highest amount of money on house flipping is to turn around the property as quickly as possible. While you need time to complete the necessary improvements and renovations on the property you purchase, the faster you are able to do them and sell the home, the more money you will be able to make. This also applies to how quickly you will be able to secure the funds you need to pay for new investment properties and the renovations required. If you choose traditional loans to achieve this goal, you will find you need to wait long periods of time for the approval process and may even be turned down more often than you would like. This is because traditional loans typically require more stringent financial documentation in order to be approved. Hard money lending works differently.
Hard money lending is obtained from individuals, rather than financial institutions. This means they determine who they will lend money to and how much. It is their way of investing in real estate without having to do the work themselves. IN order to qualify for a hard money loan, most individuals will simply require a business plan and projection, as well as evidence the value of the property matches with the loan request.
Who Offers Hard Money Loans?
The answer to this question is relatively diverse. There is no right or wrong answer. However, most of the individuals you will find who offer these types of loans are well-off individuals who are looking to put their money to work or small real estate investment firms. As long as an individual or an organization has the money to offer, they can become hard money lenders. The key is doing your research and finding lenders who are reputable and trustworthy so you know you can count on them to provide the funding you need to complete a flip and benefit from the investment.
The Ideal Short-Term Option
If you’ve ever invested in real estate via the traditional means, you recognize most of the loans you will encounter are based on long-term results. Some may even have penalties for paying them off too quickly. This is why many individuals who wish to flip properties are turning to hard money lending as an alternative. Hard money loans typically have a faster turnaround. In fact, you will be hard-pressed to find loans that last for longer than a year. This is beneficial to house flippers because the goal is to renovate the property and resell it in a short period to get the highest return on the investment.
If you are interested in flipping properties and are in search of a lender for your hard money lending needs, contact us. We offer the options you need to make the most of your real estate investments and turn a profit on flipping properties.