Real estate has been increasing in popularity compared to other investment options in 2023. Many are finding that it is not only more lucrative but a safer and more stable option compared to rising and falling stocks or other investment funds. However, real estate is a much larger investment and needs a higher buy-in than alternatives, making it seemingly impossible for the everyday investor. Fortunately, that is not the case.
Hard money loans offer an amazing advantage to those who want to add real estate to their portfolio but need the assistance of a loan. 2023 can be your year of diversification.
How Hard Money Loans Work
Unlike traditional loans, hard money loans are not given based on the person’s creditworthiness. A hard money loan revolves around the real estate in question. The property will become collateral and be the determining factor in how much the loan will provide.
These types of loans are also not provided by banks as you may expect. They are offered by individual investors or companies, such as KC Investor Funding, allowing you access to funding that might not have been available through a bank.
The Pros of Hard Money Loans
2023 has skyrocketed the popularity of real estate investments, and with that popularity, everyday investors and those looking to add more properties to their portfolios are seeking out ways to invest within their budgets. Hard money loans offer many benefits to those who utilize them.
For one, hard money loans are much quicker to close than other options. It is possible to get funding in a matter of days or weeks rather than months with traditional loans. If you have a tight timeline, hard money loans can help take the stress out of taking on larger projects and investments. Hard money loans are also more flexible regarding scheduling, negotiation, and fees. And lastly, since hard money loans use the property as collateral, you do not need to worry about your credit being in the way of your future investments.
With the accessibility of hard money loans, it has become easier to diversify into larger investments such as real estate.
Uses of Hard Money Loans
Hard money loans are mainly used for certain types of investments and projects.
If your 2023 goal is to start renovating and renting out a property or try your hand at a fixer-upper, a hard money loan might be your best choice to help fund the project. Both of these projects can be funded by hard money loans, allowing you to move forward with earning your money back quickly and completing the job.
Property flippers take advantage of hard money loans since the property is used as collateral, and the loan typically covers a significant amount of purchase costs along with repair costs. For those who want to renovate the property and then rent it out, hard money loans come with similar benefits but are expected to be refinanced for a longer period of time, ensuring the best value for the property.
Invest in 2023
Real estate will forever be a need in our society, and investing in project homes or wholesale properties can be a great strategy for future wealth. Hard money loans allow you to diversify your portfolio and start those larger projects you have wanted to do.
2023 can be your year of successful real estate investments if you are to use hard money loans. If you have further questions or want to see what type of loan you can get, contact the team at KC Investor Funding.