Hard Money Lenders a Great Option For Real Estate Investors Needing Money Fast

 

 

With home market downturn, many real estate investors have turned to hard money lenders for cash. Hard money lenders have provided another option for real estate investors to get the money necessary to invest into short-term projects. To understand how the process works, you must understand what a hard money lender is. A hard money lender is a person or investment group who utilizes their own funding to invest into other short-term investment opportunities. Hard money lenders look for projects that have equity and needs cash quick or do not qualify for traditional funding.  In exchange for providing the money, hard money lenders will charge a higher interest rate and/or points depending on the terms on the loan. If you are a real estate investor looking for a hard money lender, here are some ways to locate one.

 

Investment Clubs

A good place to start looking for hard money lenders is with investment clubs. Investment clubs are a meeting of real estate investors to network and keep up to date with any market trends.  Hard money lenders often attend these meetings to connect with other real estate investors. Even if there are not any hard money lenders present at the networking meeting, you can still find connections. Since it is a networking event, other real estate investors may be able to provide you information on who does hard money lending. You can locate the investment club by contacting real estate agencies or investment groups.

Business Bankers

Another resource to use in seeking out hard money lenders are small business bankers. Since small business bankers work in the lending industry, they can provide leads to non-traditional lenders. Business bankers use these ties to help fund loans that they would not traditional be able to fund through their banking programs. This type of working relationship allows business bankers and hard money lenders to provide leads with one another to generate business for each other.

Retirement Account Holders

Persons holding an ROTH IRA account and something similar are eligible to be hard money lenders. They are eligible because the funds from these self-directed retirement accounts can be used to invest into real estate. For account holders to invest, you will need to be able to provide them a high rate of return on their investment. In addition, you need to understand the guidelines that the IRS places for these retirement accounts. Make sure that your project falls within the rules and the account holder does not lose out on any tax benefits.

Internet

If you are unable to locate a hard money lender through the previous mentioned avenues, you can utilize the internet to locate one. The internet will provide thousands of leads.

As with anything on the internet, make sure that you make the commitment to do through research on potential lenders. Check around your local real estate community to determine if the lender is legit. Ask for references. If it is an investment group, check with the Better Business Bureau. You don’t want to be caught in a scam.

 

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