Hard Money Loans
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When you hear the term “hard money loan,” what is the first thing that comes to mind? Do you think about getting cold hard cash, let’s say $50K? Do you think about getting a type of loan that is hard and difficult to be approved in? What is it?
Defining Hard Money Loans
The term hard money loan is coined due to the fact that it’s only taken up in a situation wherein it’s already the last resort. Primarily, hard money loans are used in the real estate setting, where lenders are actually the ones giving the loans out, not banking institutions.
One good example of a win-win situation in taking hard money loans is with home or property flippers. Property flippers are businesses that completely renovate and rehabilitate real estate and sell it for a higher price.
Hard money loans are good for this industry because they’ll be able to get a large loan, which they can then use to renovate, increasing the value of it in the market. Then, they’ll use that property as collateral for the loan.
How Hard Money Loans Work
This type of loan is the most ideal for businesses that have high-risk, high-reward business models. Why? – Because hard money loans resemble high-interest loans in a short or a medium timeframe.
Regularly, hard money loans have repayment terms that go in less than one (1) year. However, there are hard money loans where it lasts up to a total of five (5) years.
How Big Interest Rates Are
As we all know, interest rates will all depend on the lender; and to be clear, private lenders aren’t banks that hardly give a nod to these types of loans.
Loans and interest rates are the only ways they get profit from, so, they’ll be able to position the interest rates to be higher than that of banking institutions. If we take it on average, the interest rate on these hard money loans falls anywhere between 8% and 25%.
“Points” in the Hard Money Loan Industry
If you’ve been in the hard money lending game for some time, then you would know what these “points” actually mean. To keep it short and simple, points are fees that usually equate to 1% of the amount the lender will tell you. It’s not a guessing game, though, so you don’t have to worry about it; they’ll compute and make calculations based on the terms you’ll both agree to.
For example, you’re going to borrow $100K. Then, for interest, your lender will ask you for six (6) points; what that means is 6% of $100K, which is $6K; that’s what you would have to pay as interest, depending on the term.
Don’t be scared about it, though, because most private lenders that offer hard money loans will try to be considerate. They have collateral anyway, so they wouldn’t actually be too scared of the funds that they’re going to let out.
Benefits of Hard Money Loans
Knowing the best time to get a hard money loan is actually the strength that it has. If you take out a hard money loan and you’re not sure how you can benefit from it, then from that point on, you already lost.
Here are a couple of the advantages and benefits of taking out hard money loans:
Since it’s not the type of loan that’s posted on a website, the loans can be different from one person to another. It’s not going to be the same type of loan is how the banks do it – it’s going to be different and you’ll have the chance to negotiate. Unlike banks and other forms of financing, hard money loans wouldn’t actually care about your credit score. Since the loan is secure with a collateral, credit scores wouldn’t actually be much of a big deal in this scenario. So, if you have bad credit, or if you have histories of bad credit, taking out a hard money loan would be the best thing to do – you just have to prepare for a larger and more lucrative interest rate, though. Last but definitely not the least would be the fast approval. When you apply for a bank loan, it would take you weeks, if not months to finish the application and to get approved. Whereas taking out a hard money loan wouldn’t actually last more than 45 days! If you are in need of hard money fast, then this type of loan is what you need! It’s fast, easy, and it’s not going to be as strict as banks! Those are just three (3) of the pros of taking out a hard money loan – there are more!
Easily Negotiable
Credit Isn’t Important
Fast Approval
Where You Can Get the Best Hard Money Loans
Across the entire state of Florida, we here at Florida Commercial Real Estate Loan Group are considered to be the best when it comes to providing hard money loans. The hard money loan programs that we have are client-specific – we do not offer generic plans that are similar from one client to another.
What you can get from us today might be a different deal tomorrow; it’s not like a regular loan that you see on a lender’s website. The best part about working with us is that you can specifically ask and negotiate for the terms that you want.
Our team of accountants and experts will assess and check if both parties are at a win-win and then we’ll get back to you with a resolution.
So, if you’re looking for a hard money loan that’s not really “hard” to consume, take it from us here at Florida Commercial Real Estate Loan Group, the best and the most trusted commercial real estate loan group in the state.
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Never wait for a loan for more than a month ever again with us here at Florida Commercial Real Estate Loan Group! Get it in less than 45 days!
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below:
