Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 8 years ago on . Most recent reply

User Stats

20
Posts
6
Votes
Donald Lanzer
  • Santa Fe, NM
6
Votes |
20
Posts

Are construction loans better than using hard money lenders?

Donald Lanzer
  • Santa Fe, NM
Posted
I posted a couple days ago about hard money lenders. Since then I have been considering a construction loan as an alternative. I'm possibly going to make my first rental purchase. It is a fixer upper and banks don't want to do the financing so I'm trying all possible ways to make this deal go through. Any thoughts? Thanks!

Most Popular Reply

User Stats

260
Posts
199
Votes
Seth Williams
  • Real Estate Broker
  • Winthrop, MA
199
Votes |
260
Posts
Seth Williams
  • Real Estate Broker
  • Winthrop, MA
Replied

Better? Eh. Different more like. Conventional funding through a bank, so much more time involved. For instance, you using your income and W2s typically to secure the property and loan, not just simply the hard asset - aka hard money - a lien position secures this loan vs you personally. With banks, and construction loans, your going to run into time to close, time to release funds in certain steps, contractor reviews, and so on. Hard money is simple, can close quick and lots of less red tape, but comes at an extreme premium in rates. If you can go construction loans, its worth exploring. If you need to get cash quick to close a deal? Go hard money. Its easy to go hard money if the points are cheap and then REFI into a Construction loan, if applicable. 

Loading replies...