Working with Chicago rehab hard money lenders can seem a controversial decision, but it should not be. Hard money lenders in the area have earned a less than stellar reputation for the unscrupulous activities of a few prominent loan sharks.
But what is the difference between a hard money lender and a shark? How can an individual tell the difference when they are signing up for a loan? The answer is quite simple and depends on the goals of the lender.
Hard Money Lenders Want Your Rehab Project To Succeed
If you are an investor or a homeowner that is rehabilitating a property in order to re-enter it on the real estate market, you can often make use of a hard money lender. If you discover that your initial capital is not enough to cover the entire cost of the project, you will be forced to choose between giving up and taking out a short-term loan.
Giving up, evidently, is no option worth taking, but a conventional loan is also not ideal for a number of reasons, not the least being its long approval time. A short term hard money loan that takes the property as collateral, however, is exactly what you need to finish work and get your property on the market.
Chicago rehab hard money lenders will provide you with the necessary capital, derived as a healthy fraction of the value of the property, and then assess a slightly higher than average interest rate for the convenience.
The Risk Of Losing Your Property
Like any loan, there is risk involved. In normal situations, the risk of losing the property is a distant consequence that only occurs in the direst of circumstances. That is, unless your hard money lender only wants your property and has designed the loan to fail. That goal is what makes the lender a shark.
Activity like this was unfortunately common in Chicago for some time, but has recently been thwarted by a number of legislative acts that limit the ability of individuals to make these kinds of loans. Investors are nonetheless advised to work with Chicago rehab hard money lenders they are referred to by a trusted source.