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Updated almost 5 years ago,
Alternative Lending Hard Money Pros and Cons
Hard money: “The Pros and Cons”
Pro
- -All CASH Transaction
- -Quick Closing Times (<14days)
- -All “Rehab Cost” are covered in Loan
- -Lower Leverage for Buyer and more Liquidity
- -Flexibility to buy Distressed and Value-Add Properties
- -Loan based on Property and underwritten so Borrower is Profitable
- -Does not show up on Credit Report
- -No "DTI" (Debit to Income Ratio)
CON
- -Higher interest rate than Bank
- -Shorter Repayment Schedule (<12 months)
- -More conservative evaluation of the Property’s Value
- -Not doing your research and working with a “Bait and Switch” Lender (check out our post on this)
Real Estate is one of the most dependable and powerful ways to grow your wealth. Shake off the Stigma of what you might think a Hard Money Loan is, and do your research.
How successful do you want to become? The FNMA (Federal National Mortgage Association, aka Fannie Mae) only allows up to 10 mortgages.
So, what are you going to do, stop growing your Empire? No. You’re going to seek out alternative financing and lending. And that is where your Hard Money Journey will begin, if not sooner.
Learning how to use O.P.M. ( Other People’s Money ) is imperative to becoming a Savvy and Successful Real Estate Investor...