|
|
Hard money lender north carolina
What is a hard money lender?
I have heard the term in internet advertisements and by word of
mouth, but was not really sure what they were or how they work.
I looked into it a little bit and found that they are actually just
private individuals with a little extra money that they make available
for investment.
They will lend the money they have to real estate investors. The
loan is usually short term and is generally used by the real estate
investors to buy and repair certain properties. So where does the
name “hard money lender” come from then? The term is a common one
used in the financial world. Soft money is money that has easy terms
and a flexible payment schedule. Hard money, on the other hand,
has stricter terms to it and the repayment schedule is rigid and
completely outlined by the loaner. With private financing, the hard
money term becomes even more harsh.
The terms of a hard money lender are usually very strict
and rigid. Those rigid terms will likely vary from hard money
lender to hard money lender. They will also likely be affected
by experience of the investor requesting. However, there are some
typical terms for hard money lenders. Usually the loan will be for
around half to three quarters of the value of the home, post-repairs.
The period is usually somewhere between 6 ad 60 months and will
charge you 2-10 points on the loan as well. Again, though, there
are going to be variations from lender to lender.
Hard money lenders are actually a great resource for you
if you want to go into real estate investments. There are a couple
of reasons. First of all, they give you money on hand so that you
can make a purchase as soon as your offer is accepted. In some cases,
these lenders will even lend you closing cost money. In addition,
they are people, not institutions. You can talk to them on a personal
level and build trust with them, which makes it something you can
really work with. You will be able to laugh with, talk with, and
even befriend your lender if you go the hard money lender route.
Keep that in mind as you enter the field, but never forget that
you do have a business relationship and that a lot of money can
often times be at stake
|
