Why Borrowers Utilize Hard Money Lenders?
Hard money loans are used by real estate investors for their quick access to capital, which is crucial in competitive real estate markets or time-sensitive investment opportunities. Hard money loans are also popular for investors seeking financing for non-traditional property types. This article will outline the basics of hard money loans and why borrowers would use a hard money lender.
What is a Hard Money Loan?
Hard money loans, also referred to as bridge loans or private money loans, are a form of short-term financing commonly used by real estate investors, house flippers, and developers. These loans are funded by private money rather than government-backed financial institutions.
Since hard money lenders don’t have the same strict regulatory guidelines and policies of traditional lenders, they have more control and flexibility in the loans they fund and the terms provided. Most hard money loans come with higher interest rates to due to their short-term nature and increased risk. Nevertheless, hard money loans are a great form of financing for fast-moving properties.
How Does a Hard Money Loan Work?
Hard money loans are typically secured by the property being financed. Similar to a conventional loan, the property being purchased or refinanced is put up as collateral. If the investor defaults on the loan payment, the lender has the right to seize the property through foreclosure proceedings to recoup the outstanding loan balance.
With an average term of 12 months, hard money loans are meant to facilitate short-term financing needs for real estate investments, such as property acquisitions, renovations, or fix-and-flip projects, where borrowers aim to quickly improve the property’s value and either sell or refinance it within a relatively short timeframe.
Loans are made or arranged by Wilshire Quinn Income Fund, LLC (the “Fund”) pursuant to California Finance Lenders Law license #603J060. The information contained in this message is for informational purposes only and is meant to provide general background information on the Fund and its manager, Wilshire Quinn Capital, Inc. (the “Manager”). Any and all information herein is deemed reliable but is not guaranteed.
Why Would Someone Use a Hard Money Lender?
There are numerous reasons why someone would use a hard money lender. For one, hard money loans are an attractive financing option for fix and flip investors that expect to purchase, rehab, and sell the property within a 12-month period. There is no need for long-term financing and the higher interest rates make sense to close the deal quickly.
Moreover, hard money loans can be a great alternative for borrowers who don’t qualify through traditional avenues. Hard money lenders don’t need to follow the stringent requirements of traditional institutions, giving them flexibility to consider a wider range of factors.
Hard money loans are also designed to finance unique properties, such as large commercial properties or residential rentals. Hard money lenders often offer more lenient credit requirements, making them accessible to borrowers with less-than-perfect credit histories. Additionally, the streamlined application and approval process of hard money loans can provide borrowers with rapid access to funds.
What to Expect from Hard Money Lenders?
When working with hard money lenders, borrowers can expect a streamlined and flexible lending process tailored to the real estate investor’s needs. Hard money lenders typically prioritize the value of the property rather than the borrower’s credit history, making them accessible to a wide range of investors. Expect higher interest rates and shorter loan terms compared to traditional lenders, reflecting the increased risk undertaken by hard money lenders. Additionally, borrowers can anticipate faster approval and funding times, allowing them to capitalize on time-sensitive investment opportunities.
Getting Started
It’s important you choose the right hard money lender for your next real estate investment. Our team at Wilshire Quinn Capital has the expertise and flexibility you may be looking for. Reach out today to discuss your options.
- Funding typically in 5-7 business days
Loan Amounts from $500,000 to $20,000,000
Interest Rates from 9% to 12%
Loan Term: 6 – 18 months
Commercial & Residential (non-owner occupied) Real Estate
- Purchase, Refinance, Cash-out Refinance, Rehab, Blanket Loans
Foreign National Loans Available
About Wilshire Quinn
Wilshire Quinn is a San Diego hard money lender focused on short term bridge loans, secured by first trust deeds. The company is based in San Diego, CA with offices in Los Angeles and San Francisco. Wilshire Quinn typically funds loans for their customers in 5-7 days. Their successful track record is closely linked to their ability to make immediate lending decisions based on their highly disciplined underwriting approach. The company funds a variety of loans such as: refinance, purchase, blanket, rehab loans, 1031 exchange, partnership buyouts, and more. They originate hard money loans ranging from $200,000 – $20,000,000. Wilshire Quinn works with commercial and residential buyers nationwide.
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