Real Estate Loans Youngsville, LA - Call (504) 527-1904
How do I find a good hard money lender?
You can find hard money lenders by:
Googling "hard money lender" with your city or state name (Example "Hard money lenders in Youngsville, LA ). Follow Us .
Attending your local real estate investment association (REIA).
Checking websites specific to investing or general business websites, like LinkedIn.
How do hard money loans work?
A hard money loan is simply a short-term loan secured by real estate. They are funded by private investors (or a fund of investors) as opposed to conventional lenders such as banks or credit unions. The terms are usually around 12 months, but the loan term can be extended to longer terms of 2-5 years.
Do you need a down payment for a hard money loan?
Although the amount required varies, most hard money lenders will ask for a down payment of anywhere from 10% to 50% --depending on the circumstances. It's important to note that hard money lenders do not make their money on property foreclosures and they are not in the business of flipping houses.
What happens if you default on a hard money loan?
If you default on the hard money loan at any point, the lender takes the property and sells it, using the funds to pay off the outstanding loan. The lender would only need to sell the home for 40% – 50% of its original sales price to make its money back.
Are Hard Money Loans Safe?
A hard money loan is not always the best choice. While it seems simple, the asset secures the loan so everybody's safe, hard money is only one option. It is expensive, so things have to work according to plan for profits to materialize. A hard money loan is different than loans you may have used in the past.
How long do hard money loans last?
Similar to a short-term bridge loan, hard money loans are primarily used in real estate transactions when the lender is an individual or company, as banks do not offer them. These loans typically last 1 – 3 years and are commonly used as a way to quickly collect money.
How hard is it to get a hard money loan?
The main requirement for getting a hard money loan is having the required down payment or equity in a particular property to use as collateral for the loan. The minimum amount usually ranges from 25% to 30% for residential properties, and 30% to 40% for commercial ones.