| At times, conditions for borrowing funds become too | | | | investing it on real estate. |
| hard for borrowers. This may be because of their | | | | These loans therefore serve as last resort for |
| very bad credit as they have multiple credit problems | | | | borrowers with lots of problems. But some time those |
| and so lenders think such a borrower is a high risk and | | | | borrowers with fewer problems also opt for the loans, |
| should be avoided. The reason for a conventional | | | | if they want a loan without delay for instant investment |
| lender refusing loan may defer from borrower to | | | | of funds. |
| borrower. So a conventional loan is not easily available. | | | | Collateral is any commercial property that has at least |
| In such a situation, you still come across lenders who | | | | 20 percent equity in it. The loan amount ranges form |
| are willing to fund your requirements. Such lenders will | | | | $150,000 to $20 million depending on equity and |
| provide you hard money real estate loans so that you | | | | property value. But these loans carry very high interest |
| can invest funds in commercial properties. | | | | rate. This is primarily because usually problem |
| These loans are ideal solutions for those borrowers | | | | borrowers are the customers and risks involved for |
| who find it difficult to get funds from conventional | | | | lenders are high. |
| sources. Or, these loans are availed when the | | | | Repayment runs from few months to 20 years. |
| borrower is going through legal problems. | | | | Typically these loans range for two to three years. |
| The main feature and attraction of Hard Money Real | | | | Such a shorter duration is mainly because longer term |
| Estate Loans is that it makes borrowing funds easier. | | | | will make the loan too expensive for the borrower. |
| This is because the lender sets aside all | | | | These loans therefore are meant usually for easy |
| documentations and verification that a normal loan | | | | access to the funds and early coming out of the loan. |
| requires. So the lender just does not look into | | | | As far as sourcing is concerned, every lender will not |
| borrower's income, employment, credit, tax returns, and | | | | give you hard money real estate loans. Only some |
| assets. All other details like foreclosures, bankruptcy, | | | | private lenders are in this field. So you will have to |
| judgments, unreported income, source of down | | | | make a good search. Compare the lenders for a |
| payment etc. a borrower's bad credit history is | | | | suitable deal. |
| completely ignored by the lenders in offering loan for | | | | |