Hard Money Loan Definition:
A hard money 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 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. Business hard money loan lenders
can often help solve the problems and get the property
repositioned for a conventional refinance.
Hard Money Loan Lenders
All hard money loan lenders are different. The hard
money 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 loans typically last?
Hard money 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
loan lending, the goal is to have the borrower in and
out of the hard money loan as quickly as possible. The
hard money 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 Loan Equity
The amount of equity needed for a hard money loan depends
on the quality of the real estate and the hard money loan
lenders themselves. The hard money loan lenders of Coastal Coastal La Jolla Funding prefer 20% to 25% equity.
If you would like to apply for a hard money loan through
the Coastal Coastal La Jolla Funding, click on our hard
money loan application.
For information on hard money personal loans, click on
our hard money personal
loans. |
