Education

To those who haven't yet learned about hard money loans, they can seem confusing and a bit mysterious. Many real estate investors use hard money loans as the backbone of their operation as they provide ample, quick capital for purchasing property, repairs, construction, flips and everything else in-between.

Also known as consumer-purpose loans, owner-occupied loans are funds offered to finance a property which the borrower intends to occupy as a primary residence. Resource constraints, perceived risks, and low expertise are some of the challenges facing the private lending sector hence only a few provide owner-occupied hard money.

Have you heard about bridge loans? What is the definition of bridge loans? How do they work? Are they costly? What are the pros and cons? Do hard money lenders offer bridge loans? We answer all of your questions.

Hard money refers to a short term loan you can use to buy and/or renovate commercial or residential real estate. You can also use it for land purchases. The loan requires some asset to be put up as collateral, such as another property that you already own.

Most hard money lenders only accept first lien position when giving out the cash. So in case you default, they are the first to benefit from the liquidation of the property used as collateral.

Many people think that hard money loans are universally unregulated. Since their underwriting standards seem a bit relaxed, you can’t help but ask yourself, Are hard money loans legal?

Hard money loans for real estate investors are more likely to hurt the revenue from the property. So it’s wise to refinance the loan. Rates for conventional loans are a bit lower. How do you go about hard money loan refinancing? What options do you have?

Financial institutions are traditionally the basic lenders to real estate investors. However, recent lending regulations have tightened the terms of engagement, leading investors to look elsewhere.