When buying property for the purpose of investment, it is beneficial to have a variety of techniques up your sleeve. In order to properly use these techniques, investors should know when and how to apply them effectively. A perfect example is using a hard money loan to finance the purchase of investment property. These types of loans have become a common practice in commercial real estate, but should only be used under certain circumstances.
Why Turn to a Hard Money Lender?
Manhattan NY hard money lenders are private lenders that provide loans to real estate investors. They have access to large sums of money that can be used for short-term loans. The typical length of a loan ranges from six to twenty-four months. This gives you the opportunity to purchase a property and make any necessary fixes in order to put it back on the market.
Since the financing they offer is private, the interest rates will be higher than for a typical bank loan. That is why these loans are not appropriate for every deal and should only be used creatively. When using a hard money loan, don’t focus on the interest rate. If your plan is to quickly resell the property, your attention should be directed towards the advantages of using the loan.
- Faster Financing – The traditional loan process can take between thirty to forty-five days. Hard money lenders can process a loan in a much shorter time period. Depending on current resources, a loan can be obtained within a two to three weeks time frame.
- Repairs Covered – Hard money lenders will allow you to include the cost of the repairs in the loan.
- Loan Basis – Loans are based according to the deal, and not on the borrower.
If you need an alternative to traditional lending, Manhattan NY hard money lenders are your best one.