How about we debunk three crazy but common myths about hard money lenders in Delaware County PA?
Real estate investors all over Pennsylvania and throughout our country are funding projects with hard money loans. They are commonly used by house flippers and other types of investors, and are very effective for that kind of short-term investment. The myths about hard money lenders come from people who’ve never had hard money loans and probably watch a little too many house-flipping shows television. Here’s the truth to counter these three common myths.
Myth #1: Hard Money Lenders Are Loan Sharks – FALSE!
The idea of a predatory lender cashing in on people’s desperation or foolishness may be a common stereotype presented by Hollywood on the big screen and on TV, but it’s not real life. That’s no way to build a reputable business. Hard money lenders are interested in giving loans to real estate investors who will successfully purchase a property, fix it up and flip it for a substantial profit. These lenders are successful businesspeople, oftentimes real estate investors themselves, who operate much like small banks following regulations, but specialize in offering the kind of loans that meet the specific needs of fix-and-flip investors. For example, we here at Legacy Capital are real estate investors ourselves and we understand the challenge and importance of accessing funds so you can do more deals. And, thanks to our combination of investing experience and lending experience, we are able to provide in-depth insight for investors. After all, when you win, we win!
Myth #2: Interest rates are sky-high on hard money loans – FALSE!
Your 20 or 30-year mortgage from the bank on your home likely has a lower interest rate than most hard money loans. That’s true, but real estate investors are not looking for 20 or 30-year mortgages. It makes sense to them to pay a slightly higher interest rate for a shorter term loan, which can be obtained much more quickly than a mortgage from the bank. House flippers know that banks are reticent to loan money for houses in poor to bad condition, but these are often the houses they want to buy cheaply, renovate quickly, and then sell for a big profit. Hard money lenders understand this business model and will loan the money quickly for the short term needed, but they do need to charge more interest because there are more risk factors in play. It’s all part of doing business. Hard money loans can be a great way to “invest” in scaling up your real estate investing business.
Myth #3: It’s hard to get hard money loans from hard money lenders in Delaware County PA – FALSE!
If you’ve lined up a good real estate investment, a hard money loan is easy to get! They are not called “hard” money loans because they are “hard” to get. The name comes from the fact that the loan is backed by a “hard” asset… the property. When considering your loan application, hard money lenders in Delaware County PA are more concerned about the property and your rehab plan than your credit score. If you have a solid plan they are likely to approve the loan, but may need to adjust the interest rate because of a lower credit score. Most of the time, hard money loans are actually the easiest way for investors to fund their projects.
Would you like to deal with a lender who understands your fix-and-flip business model? A lender who wants you to succeed and keep coming back for more loans? A lender who will approve your loan quickly and get you the money when you need it? We’ve gone over the truth to debunk these common myths. Hard money lenders in Delaware County PA are ready and interested in helping your real estate investment business succeed.