The chances are that if you are working in the construction industry, you have probably taken notes of the various financing resources available to fund ground-up projects. However, if you are trying to break into the business of construction, you may be unaware of one of the most popular forms of securing financing for your development projects.
Traditional Financing Versus Private Hard Money Lending
Many people only consider approaching banks for loans, but when it comes to ground-up construction or fix and flip real estate purchases, nothing beats seeking money from private lending companies who specialize in funding development projects. While banks can see your project as carrying too much financial risk, or you may not have enough money to pay for the required amount of upfront loan costs, private lending companies can offer “hard money” to get your project off and running quickly.
How Hard Money Lending Works
These “hard money lenders,” such as HardMoneyMan.com, LLC, can offer construction loans as a form of finance based on the purpose of your property, regulations in your state, and how much your project will be worth upon completion. It may even be possible to borrow up to 100 percent of the vertical costs and up to 50 percent of land acquisition, and depending on your project and investor, the funding may cover the entire project.
Another benefit of hard money loans is that your project can be funded quickly, making it attractive to fix and flip projects as these are typically time-sensitive scenarios. If your project is time-sensitive in nature and calls for a quick close, the more information you can provide a hard money lender, the faster you can receive a loan.
Focusing On Your Project Projections
Hard money lenders can also work with you if you have a less than desirable credit history, even though the better your financial background is the easier the process will be. These lenders look at the amount of anticipated profit your project will make, and the loan is for a short term period of construction, so they are able to work within those boundaries to provide you funding necessary to begin.
Know Your Plan Inside And Out
The information you need to present to secure a hard money loan is dependent on your project but typically includes its location, prospective turnaround times, contracting outline, and profit forecasts. The more prepared and confident you are in your project projections, the better, so doing your homework and being prepared for your meeting with lenders is key to securing a loan quickly.
Hard Money Lending Can Get Your Project Off The Ground
If you are planning a ground-up construction project, or have a fix and flip idea ready to go, considering a hard money loan should be a priority. The financial and timing benefits far outweigh traditional mortgage banking loans, giving you access to funding that gets your project off the ground and sees it through its completion.
Contact HardMoneyMan.com, LLC for consultation on your next construction project and find out how hard money loans can benefit you.