INVESTOR RESOURCES
HARD MONEY
The Need-to-Knows About Hard Money Lending
FINDING A LENDER THAT SHARES YOUR GOALS
by Matthew Schlegel, Temple View Capital
he word “hard” in hard money lending may seem off-putting,
T
WHY SHOULD I CONSIDER SECURINGAHARDMONEY LOAN? We’re glad you asked! While hard money loans can be a more expen- sive option with slightly higher interest rates in place—anywhere from nearly 8-10%—there are many beneficial reasons for opting to take on a hard money loan vs. a tradition- al loan through a bank. While traditional loans can take a month or more to be approved—if you’re approved at all—hard mon- ey lenders can get you funds within a week or two. Because the loan is heavily dependent on the collateral
and borrower’s experience, lend- ers are less concerned about going through a traditional loan application making for a quicker, more seamless process without the burdens of red tape. These loans are typically short- er-term—lasting anywhere from one to five years—and make them ideal for investors who are looking to fix and flip property. Since flipping often happens on a short timeline—within a year or so—the loan can be quickly paid back. There’s also a high propensity for hard money lenders to be flexible in the terms of an agreement as they
but don’t let the term scare you off from considering it a viable option when looking to scoop up property. Often used for real estate transac- tions, a hard money loan comes from a private lender instead of a bank and provides real estate investors with the financing needed to quick - ly purchase property. Unlike the requisites that come with applying for traditional bank loans, private lenders make decisions based on an investor’s experience, collateral, and borrower’s performance rather than their credit and income.
62 | think realty magazine :: may 2021
Made with FlippingBook Online newsletter