Benefits of Hard Money Loans for Land
A common misconception is that getting a loan from a bank (traditional loan) is better than getting it from a private company. As soon as you get into the field of real estate, you will realize that it is far better to approach private companies for loans compared to banks because these companies don’t ask you for your credit score and put other qualifying standards in front of you to meet if you want the loan (this is what the banks do)
So what should the person do if they can’t fulfill the requirements? Should they not invest in property? Well, that is plainly absurd. And due to this absurdity, most real estate investors don’t depend on traditional loans for their investments.
Then what do they do? They turn towards hard money land loans for quick and easy financing for real estate.
What is a Hard Money Loan?
At a glance, a hard money loan is money that is borrowed from a private lender based on a specific contract (according to the lender and borrower). The contract talks about all the details that are discussed between both parties.
It works just like a bank loan, where the borrower gets the loan, and the lender receives interest on it on a monthly basis until the loan is paid back.
3 Benefits of Hard Money Loans for Land
Quickly Processed
Since private lenders give these loans, they are processed much faster than traditional loans, and anyone who wants to get the loan quickly can explore this option easily.
This is one of the best advantages of a hard money loan: you don’t have to wait weeks for loan approval because it can be done in a matter of 2-3 days.
Higher Borrowing Limit
This means that you can borrow a larger sum of money on your terms, too, quickly. However, if you are borrowing a higher amount, then you might need to pay 5% of the value of the property as a down payment.
The down payment is higher in banks compared to private companies.
And you know what is amazing? If you are on good terms with our lender, you might convince them to lend you 100% of the loan without having to pay the amount for a down payment. This is something you can’t do with traditional loans.
Condition Flexibility
Most investors go for BRRR or fix and flip strategy, so these strategies are used on distressed properties. This means that those properties that need major repairs are at a discount. After these properties are renovated, they are either sold to home buyers or turned into rental homes, which become a source of passive income.
You will get the loan based on HOW the building will look after renovation, and they don’t care about the current condition.
Conclusion
These were the 3 top benefits of hard money loans. To get your hard money loans from the best lender, you must get in touch with Miles Capital Partners so that they can properly guide you on how to go about getting the loan approved.
