Choosing to invest in real estate can be the perfect way to start earning a passive income and grow your portfolio. If you are a new investor and starting to look at properties to acquire, you are probably also looking at your financial options. Hard money loans are a choice that many investors, new and experienced, choose to make as it can be exactly what you need to have a quick and easy profit on your fixer-upper. So, if you are a new investor, don’t fear the idea of a hard money loan.
The Short Answer: Yes.
If you couldn’t already tell, yes, hard money loans are an amazing choice for new investors who are looking for financing options for their first property. Hard money loans can be excellent for those just starting in the industry and want to get their hands on their first property quickly.
What Types of Hard Money Loans Are There?
Hard money loans are best used for certain projects. If you want to get your hands dirty with a rehab project, hard money loans are your best option.
Depending on the type of project, you could seek out hard money loans such as…
- Fix & Flip
- Residential Rehab
- Buy and Hold
- Bridge Loans
- Cash-Out Refinancing
- Ground-Up Construction
With these options, all sorts of rehab projects can be done.
Why Hard Money Loans Are Great for New Investors
Don’t Worry About Your Credit
Hard money loans don’t look at your credit as much as other loans or financing options. The loan approval process is much less based on your credit and more concentrated on the property’s value now and in the future. So, you don’t have to worry if you have bad credit or no credit.
Short-Term Real Estate Investments Are Your Goal
Hard money loans are known for being quick in the approval process and payback period. A hard money loan is your best option if you are focusing on a rehab project or general short-term investment options. If you are looking to invest in property as a primary residence or a more long-term investment, going through the process of a mortgage can be beneficial.
Development Is Time-Sensitive
Most real estate investments are time-sensitive, but hard money loans are your best bet if you are looking to move quickly in your project and move on to the next. Hard money loans offer a fast approval process, which can get you the keys to the property much quicker than any other loan program.
Pay It Off in 3-12 Months
If you want to pay off your loan in the year of obtaining it, a hard money loan is your way of doing so. Hard money loans are prompt, and if you want to refinance or choose a permanent mortgage soon after obtaining the property, start with a hard money loan.
Hard money loans are great for those who are just starting out in the investment industry, but they are also great for experienced investors who want to act fast and sell fast. If you have further questions, contact the team at KC Investor Funding today.