Friday, September 9, 2016

Advantages Of Using Hard Money Lenders Seattle Area

By Donna Hayes

Many of the drawbacks to investing in real estate is getting quick funding for your needs. Traditional lenders make it difficult at best to get the loan you need to buy a property and they don't provide any additional funds to fix it up unless you take out another loan for that. The process can be daunting and frustrating. You can however get money quickly to invest from hard money lenders Seattle, WA area.

A hard money lender is a private individual or company that has money to loan for investment purposes. They usually work with real estate investors who need quick funding on homes that have yet to be listed or are in foreclosure or otherwise distressed property. These types of lenders do not have strict requirements and do not base the loan on your credit scores but rather the value of the property.

These lenders are ideal for a short sale or house flipping, and you get the funding fairly quickly. This funding allows you to receive the value of the property plus rehab money to fix it up once you obtain it. After you rehab the property and fix it up you can then sell the home for a profit and pay off the lender and have money left over.

The way the loan works is ideal for real estate investors but it doesn't fit every situation or circumstance. You must determine if this type of funding is right for your project and whether you can sell the property at a profit instead of a loss. Usually after a property has been rehabilitated, the value of the home goes up to a fair market value.

If you are looking at investing in real property consider the lenders available to you and compare interest rates and the final cost of the loan. Mainly can you afford the cost of the loan. Sometimes you may not be able to sell the distressed property at a profit and only break even, this is an unfortunate situation since you must repay the lender once you sell the property and can be a disadvantage if you do not at least make the fair market value of the home.

If you are an REI and are looking for quick funding then this is the source you should consider. There is risk with any business venture but there is less red tape and hoops to jump through for the funds you need. Traditional banks make you wait approximately 30 days before your funding comes through which is not the ideal situation for a short sale or foreclosure.

For some investors this type of funding may not be right for them. You must weigh all the variables and decide if it is the right way to go. If you have poor credit and can't get a traditional loan then you may need to consider this source instead.

You must do your due diligence before entering into any agreement and seek professional help if needed. Always go over the contract with a fine tooth comb so there are no surprise clauses or wording that causes confusion. You ultimately make the final choice as to whether or not this is right for you.

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