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Hard Money Real Estate Loan Definition:
A hard money real estate loan is a short-term bridge loan
that is used for acquisitions, turnaround situations,
foreclosures and bankruptcies. Interest rates, although
high on business hard money real estate loans, are less
costly than taking on a financial partners or losing the
real estate opportunity altogether.
Who are Hard Money Real Estate Loans Ideal for?
Hard money real estate loans are ideal for borrowers who
are unable to obtain funding through a conventional source.
The properties or the borrowers are often clouded by legal
or operational problems. Hard money real estate loan lenders
can often help solve the problems and get the property
repositioned for a conventional refinance.
Hard Money Real Estate Loan Lenders
All Hard Money Real Estate Loan lenders are different. The Hard Money Real Estate Loan lenders we refer clients to will usually
consider income producing properties such as apartments,
condo/co-op conversions, retail/shopping/strip centers,
mixed use properties, industrial, office buildings,
hotels/motels, medical, mobile home parks and restaurants,
as well as non-income producing properties such as land
acquisition, development and construction, bank workouts,
foreclosures and bankruptcies.
How long do Hard Money Real Estate Loans typically last?
Hard money real estate loan terms are typically no longer
than two to three years. The reason is simply that a longer
term becomes too expensive for the borrower. With hard
money real estate loan lending, the goal is to have the
borrower in and out of the hard money real estate loan
as quickly as possible. The hard money real estate loan
lender will analyze each transaction during the due diligence
process for "good risk" -- to be sure that a property
can be repositioned for conventional refinancing or sale
within one or two years.
Business Hard Money Real Estate Loan Equity
The amount of equity needed for a hard money real estate
loan depends on the quality of the real estate and the
hard money real estate loan lenders themselves. The Hard
Money Real Estate Loan lenders of Coastal La Jolla Funding
prefer 20% to 25% equity.
If you would like to apply for a hard money real estate
loan through the Coastal La Jolla Funding, click on our
hard money real estate loan application.
For information on hard money personal loans, click on
our hard money personal
loans.
For a print version of this page, click on hard
money real estate loans print
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