What it Takes to Get a Hard Money Loan Thinking about getting into real estate investing but worried about qualifying for a loan? Welcome to, ‘What it Takes to Get a Hard Money Loan.’
On investment property purchases, many people use hard money loans to purchase properties quickly to take advantage of good deals. It’s not credit or income requirements that a lender is focused on when approving you for a hard money loan to buy an investment property. There are 3 primary things that a lender looks at when qualifying you for a hard money loan.
Collateral. Just about any loan requires collateral, or security for the loan. The collateral for a hard money loan is real estate. In order to qualify for a hard money loan, you need a good property to use as collateral.
Next, you need cash. You need a cash down payment on a new property purchase, or you need the equity in a property you already own that you’re seeking to refinance. Yes you need cash or cash equity to invest in real estate despite what many of you have heard.
Lastly, you need an exit strategy, which is just a plan for paying back the loan. Typically, you have a 12 month term on a hard money loan. This means you have 12 months to pay it back. Having a solid plan for paying back the loan is critical to your success. Whether your plan is to refinance with a longer term loan and hold the property, or add value to the property and resell it, you will always need an exit strategy for your hard money loan.
To sum up, qualifying for a hard money loan hinges on three key elements: Collateral, Cash, and an Exit Strategy. Please hit that like button and subscribe for more real estate lending insights that will help you in your real estate investing journey.
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By: High West Lending Title: Real Estate Funding: How to Secure a Hard Money Loan Successfully Sourced From: www.youtube.com/watch?v=57Q5fTPAJFc
