What is hard money lending and how can I use it to buy investment properties?
Posted by Merrill Jencks on Wednesday, December 15, 2021 at 5:23 AM
By Merrill Jencks / December 15, 2021
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What is hard money lending and how can I use it to buy investment properties?
Have you heard of hard money lending? It's kind of like a legal loan shark, hard money lending is basically private individuals or equity firms who will lend out their money so that you can buy a property. If you don't have all the cash for it upfront now you can't necessarily pay a hard money loan with a traditional loan unless you're doing some sneaky investing but let's say that you know this was an experience that I had recently I was buying a property from a wholesaler and it had to close fast we only had two weeks to get it closed so I couldn't get a traditional loan on it and wait 30 to 45 days for the lender to finish the loan so what I did is I went to the wholesaler said hey I've got all this money I've got all these assets I'm very well qualified for a traditional loan but I need cash to be able to buy this property fast so they gave me a hard money loan I still put my down payment and then they lent me their own money for the rest of the purchase price and we still had insurance and title insurance and all those things all done on the up and up and I was able to buy the property and then I refinanced it into a traditional loan a month or two later so wholesaling can obviously you're paying a higher interest rate on wholesale loans so it can get very expensive especially if you're using hard money on flipping and the flip is going to take you six or seven months it can get really expensive but if you've got an opportunity to buy a property you want to hold long term you just got to refinance you might only need to keep that hard money loan for 30 days it's really not too terribly expensive and it could help you get into a property that you might not otherwise be able to buy in time so if you need a referral for hard money lenders let me know I've worked with several in the past.
What does this mean to you? If you're even a little bit interested in learning more about participating in the Phoenix housing market as a seller, buyer, or investor... you NEED to know this stuff! Or at least work with someone who is obsessed with the market stats. Reach out to me today so we can start working on making your real estate dreams a reality!
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