One of the most popular forms of financing for real estate investors, without a doubt, is the hard money loan. But what makes hard money loans so highly sought-after? There are numerous reasons why real estate investors like working with hard money lenders, but chief among them are the fact that these loans are fast, flexible, and carry more weight. Below, we’ll take a closer look at just three of the reasons why investors like working with hard money lenders, in particular.

    1. They speed up the process
      Real estate is supposedly all about location, but timing plays a key role, too. To be successful, investors need to be able to be approved for a loan, make a solid offer, and obtain funding at lightning speed. One of the most attractive parts about hard money loans is that they have a quick turnaround time. Typically, they’re processed within seven to 14 days. With these loans, they’re able to make investments quickly, rather than waiting for the standard approval and funding timeframe (which could take a month or more).
    1. They strengthen offers
      Seasoned investors will often face fierce competition for properties. In cases where a piece of real estate has multiple offers, an investor with a hard money loan will often win out. These loans are seen as being particularly strong, mainly because they’re usually much more reliable sources of financing than other types of bank loans. Conventional kinds of financing could be pulled by the bank during escrow, which can totally kill a deal. But in the majority of cases, this won’t happen with hard money loans — and sellers know it.
  1. They don’t require income or credit approval
    When you apply for a loan through a bank, they’ll definitely take your credit score and income into consideration. And if either falls outside their guidelines, your loan probably won’t be approved. In contrast, private money lenders will mostly consider the value of the property in question and the equity the would-be borrower has in it. While the lender will need to be comfortable with both of those figures to give funding, this is usually good news for investors who may have income tied up in other properties.

If you’re a real estate investor looking to improve your offers, our CA hard money lenders can help. For more information, contact Maggio Capital today.