If you are a real estate investor, you should not focus on a single method of financing your projects. Not only are there various strategies that you can use, but various financing options are available to you. You will become a better investor if you know how use the different methods. Hard money lenders in Florida could be useful to make your transactions less problematic.
Hard money lenders in Florida charge higher than bank rates, but this should not be a deterrent if your intention is to flip a property. The return that you will gain on selling your newly refurbished property should be high enough to carry a short term high interest rate loan. You will not be holding the loan for long enough to make a huge impact on the bottom line.
This type of loan may not be suitable if your intention is to use the property as a rental. In this case, you could opt for the bridge loan initially and then re-finance the property by a traditional method.
There are three reasons why the term ‘hard money’ is used and none of them relates to difficulty obtaining the loan.
• The high interest rates applicable to the loan make it a costly form of financing. There are however benefits related to this type of loan, depending on your use for it.
• The lender provides loans based on the asset’s value rather than on the borrower’s financial status. The deal is important to the lender, rather than your personal circumstances.
• Most hard money lenders in Florida will not exceed approximately 60 to 65% of the property’s value after it has been repaired. They will determine the value the property would be worth when it is in its best state of repair.
There are excellent benefits related to loans from hard money lenders in Florida. One of these is the fast turnaround time for approval.