If you need more cash than what New Jersey hard money lenders are willing to provide, how do you obtain the rest of the cash you need? It’s a difficult question when you consider that a hard money loan is based solely on the value of the property. The hard money lender takes an interest in the property, so you will be unable to obtain additional funding that requires a lien to the property. What other options do you have available for your needs?
If you have good credit and your bank was unable to approve your loan for reasons other than credit, you may be able to obtain some funding with an unsecured loan. Since hard money lenders typically loan only 60-70% of the value of the property, borrowers can be substantially short of the funds they need unless it happens to be a rehab project. Depending how much money you need and your credit history, you may be able to obtain a substantial amount of funding in unsecured debt.
Personal Equity Loan or Line of Credit
Another way you can add to the funding you obtain from your hard money lender in New Jersey is an equity loan against your personal residence or any other property in which you may have an interest. The more properties you own, the more equity you will be able to unlock to help you complete the project you are currently using hard money to finance. Be careful not to overdo it so that you do not tie up the equity in all your property to finance the one project on which you are working.
Sale of Liquid Assets
Getting rid of some of your company’s liquid assets such as stocks, bonds and other securities will help you raise money to finance any difference between the amount of money you need for your project and the amount you are able to obtain in hard money. If you choose you may also invest some of your own personal liquid assets to finance the project and return those funding when you are able to finish the project and have profits generating from the new venture. Some of your assets may have a borrowing option that may work better than simply selling them and having to repurchase them at a later date and perhaps at a higher cost.
Joint Venture Investors
In addition to New Jersey hard money lenders you may find some private investors who are willing to provide funding for your project as part of a joint venture. This means in most cases they will share in the profits your company generates for a specific period of time. Make sure you understand the terms before you include any investors because some require an interest in the company for a specific period of time while others prefer to maintain an interest as long as the company is in business. This can be very expensive over a lifetime, so you should do some investigation before you choose an investor to help you finance your latest venture.