Hard money loans or private money loans can be described as a loan that is borrowed from a firm that secures the loan through a physical asset. Private money loans are more often used for real estate investing. When it comes to real estate investments, there are a few things to be aware of. Trying to keep up with the competition in the industry is one of them. This means there needs to be a quick and adequate offer that can secure the purchase. Traditional moneylenders (like banks) don’t often take the risk when it comes to risky investments. In addition to the slow process, traditional lenders may even reject a loan application for a real estate investment even after the long waiting period. That means there is a good chance that a real estate investor may lose the property they have their eye on.
For that reason, when an investor seeks to purchase a distressed property, they may be limited to their options when it comes to funding the purchase. Real estate investors who want to rehabilitate property for reselling (commonly referred to as flipping) often turn to hard money lenders.
Other real estate investors who purchase income properties may use private money loans until they are able to stabilize the property. Once the property becomes stable, they can then apply for a traditional loan to settle the hard money loan.
Potential borrowers can also use hard money loans if they are unable to obtain a traditional loan due to bad credit. On the other hand, private money loans are more interested in the value of the property and whether the borrower can settle the loan.
If you consider private money lenders to suit your financial investment, BridgeWell is one of the most reliable Cedar Rapids, IA Hard Money Lenders in the state. Contact BridgeWell now for inquiries if you’re looking to obtain super-fast funding and approval for your real estate investment opportunities!