What Are Hard Money Lenders?

If you are interested in real estate investing, you have likely come across a post discussing hard money. Hard money loans which are a versatile tool for any real estate investors come in handy for any large number of real estate investments.

Hard money lenders make it easy for real estate investors to have easy access to capital and to close on a large number of investments.If you are thinking of house flipping or renting, a hard money loan may be beneficial for you to ramp up your investments.

We break down what are hard money lenders, and how you can use them for your benefit!

What Are Hard Money Lenders?

Hard money lenders offer hard money loans to real estate investors for their various projects. From House flips, refiances, bridge funds, or even home rehab projects, hard money lenders make it fast and easy to get the funding you need for your flip!

Hard money loans are different from traditional bank and mortgage loans. Hard money loans use the value of a property as the lending criteria instead of the borrower’s credit. Phoenix hard money lenders use the value of a property to lend to a borrower, not credit or background checks. This leads to fast funding times, and shorter applications which make it easy for lenders to get the cash they need!

Hard money loans have shorter loan terms, and high rates because they are asset based. Most hard money lenders work closely with house flippers who only are looking to fix and flip properties and not hold properties long term. Which makes these types of loans perfect for flipper funding.

Types Of Hard Money Loans

There are many different ways house flippers use hard money loans. The most common hard money loan types are:
1. Fix and Flip loans
2. Home Rehab loans
3. Bridge Loans

Fix and flip loans are often used to buy, repair, and sell flipper properties. These loans cover the bulk of the purchase, and repairs. This type of loan is generally based on the after repair value of a property.

Home rehab loans are used to make one-time large repairs to properties. These types of loans are great for landlords wanting to make repairs to their rentals and attract more tenants. These loans are still based on the property value of the investment, but are usually used to fund only the repairs. Sometimes real estate investors use these loans to prep a property before listing to make more money!

Bridge loans are a special type of hard money loan. This loan is used to ‘bridge’ the gap of funding for a property, and are often used to prevent foreclosure on a property. Depending on the investment this can easily be refinanced, or used to get a property sold.

There are many other ways to use hard money loans for real estate investments, and hard money lenders are quick to help you find the perfect loan for your investment!

Hard money loans make funding your properties quick and easy! By using the property value of your investment you can easily purchase, repair and flip more homes using hard money loans! Learn more about hard money loans scottsdale here.