Real Estate Improvements Can Be Accomplished With Hard Money Loans You will need a plan, a contractor and funding when you're looking to make improvements on your commercial or non-occupant residential properties. The last of these requirements, more often than not, is the most difficult to get, particularly when you have little or no credit. These are the times when hard money loans will be beneficial; however, what exactly are they, how will they help you and where do you find them? Exactly What Are Hard Money Loans? A loan that is “hard money” versus “signature” is one that utilizes asset-based collateral instead of a signed contract to secure funds. Meaning the lenders are able to base their decision more on the value on the collateral instead of on the credit score of the borrower. These loans are often issued to property owners who're looking to generate more income from their real estate by renovating it. Many of these loans are offered by individuals or private companies who use the interest income to supplement retirement funds, as opposed to banks or large lending institutions. For that reason, you are more prone to find lenders in your area that want to help improve their cities, along with making a profit. How Do They Help You Make Money? Whenever you own commercial properties, it is generally making you money in some way. Whether or not you own the building and rent it for retail business or you run your own business on the property, this type of real estate can be used to make some type of profit. You aren't earning your financial potential, if your building needs improvements or renovations. For example, an empty warehouse may generate more income by dividing it into retail spaces. For non-occupant residential properties, a loan for renovations will make the difference between renting dated apartments and renting updated spaces. Quite often, it will be easier to rent a newer space for more money because the tenants will have the reassurance that there won't be any structural issues. This type of loan will help you to fix up and turn around your rental spaces rather quickly or help you buy more land or units to rent. Where Do You Find Lenders? No matter what kind of loan you are looking for, you can find numerous lenders willing to hear your proposal. There aren't any exceptions to hard money lenders and you may discover that there are plenty of lenders in your area that provide this type of loan. You will be able to take your time, when this is the case, and have the ability to research each lender to be sure that you're getting the best terms as you possibly can. It's always a good idea to have your lawyer go over any paperwork, which is true with any loan, before you sign it. The more research one does on your lender and the kinds of loans available to you, the better you'll be able to understand your part of the bargain. Typically, hard money lenders only lend to a specific city or state and aren't likely to be national lenders.
Real Estate Improvements Can Be Accomplished With Hard Money Loans Getting loans can be intimidating, and collateral-based loans may be doubly so. Making sure that you understand everything you can about the loan options that are offered will help with some of the stress that comes with borrowing money and with renovating your property. Provided that you remember that hard money loans are collateral based loans created to help make renovations to commercial properties, you can find good lenders in your area and get started. You will need a plan, a contractor and funding when you're looking to make improvements on your commercial or non-occupa...
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Published on Apr 24, 2014
You will need a plan, a contractor and funding when you're looking to make improvements on your commercial or non-occupa...