The Truth about Hard Money
This is the last part of a series of 3 articles about myth and truths of the hard money lending business. In this last article we will talk about some of the truths about hard money loans. People wonder about the lenders, whether they are professionals or not, also about reasons to go for a hard money loan, and last but not least about the security of the loan.
Is it true that hard money lenders are professional and not “Scam Artists”?
The truth is that most hard money lenders like many other bankers are hard working professionals with reputations at stake. The problem always is that there are few bad experiences and few bad apples in this business like in most businesses. Like banks, hard money had its good and bad lenders. As the industry evolved over time, there are many more good than bad today.
The key is, like in any other business, is knowledge. You need to know the difference between a good and a bad hard money lender. You will find this out when you do your due diligence. First learn about the product and services that they provide. Second, learn about the lending process. Third ask for references, professional as well as previous clients. And last but not the least is to not be afraid to ask questions. Most of the hard money lenders today are well-trained professionals acting in the best interest of their borrowers. The hard money lending industry has changed significantly over the last decade.
Is it true that hard money loans are only for desperate borrowers?
First you need to understand the basic difference between hard money, banks, and other financial institutions. They all provide special products and services for the needs of different clients. A bank for example will allow for the ease of financial transaction including providing loan to their clients, but those loans fall into the cash flow based type of products. Hard Money lending is based on the asset and not the cash flow.
Because a number of transactions will not fit the conventional lending practices, hard money loans are just another means of financing these transactions. Some of those products that hard money offers are; Commercial bridge loans, land loans, and residential rehab loans.
Is it true that hard money lenders are out to steal my property?
That is not the business of a reputable hard money lender. As a matter of fact they will be really hard when looking at the particular property before making any kind of decision. Do you know why? Because they don’t want the property back, and will do whatever it takes to help the borrower pursue a viable exit strategy. They earn their living by lending and servicing your loan on behalf of their investor. If they take your property, the stream of income stops and the client is loss. And believe me when I tell you that is not what the hard money lender wants. On the contrary what we want is for you to finish your project and to profit, so you can keep coming back for more transactions.
We understand that finding the right hard money lender may be a challenge, so make sure you are dealing with someone who has the knowledge, reputation, and ability to close your loan. Mike’s Hard Money will provide you with the real estate investment cash you need for your deals getting you closer to your desired lifestyle. When it comes to Hard Money Loans no one but Mike can provide you with CASH in a FLASH!