Disadvantages Of Hard Money Loans
Though the good tends to outweigh the bad, there are still a few downsides to acquiring hard money loans – they are risky for both you and the lender. Here are the top three reasons why people find hard money loans unattractive.
Interest Rates Are Higher Than Traditional Bank Loans:
Hard money loans will always have a higher interest rate because they are short term, and there is an increased risk for the lender. Interest rates usually range anywhere between 9-15%. However, competition brings rates down, especially in populated areas.
Hard Money Lenders Require An Equity Or Down Payment Of Roughly 25-30%:
The reason why Hard Money Lenders are able to look past blemished credit scores and other personal hiccups is because the equity will act as loan security. Without this, the hard money lender is taking a huge risk if they decide to lend you the money.
They Are For Short Term Use Only:
Hard money loans are usually written for 6 months-2 years (rarely any longer). The longer the loan term is, the riskier it gets for the lender. This is because no one knows where the interest rates will be at the end of the term, meaning the lender loses more money.
The Different Types Of Hard Money Loans
There are many different types of Hard Money Loans for various different projects – and knowing which one you’re looking for is the very first step. Call RTI Bridge Loans at (562) 857-2285 for more information on hard money loans in Long Beach, CA.
Just how they sound, bridge loans are a hard money loan type that “bridges” between buying a new property and selling an old one. For example, they are meant for people who are trying to buy a new home, but they have yet to sell their old one. When the old home is sold, the loan is paid back in full.
Hard Money Loans:
Hard money loans are the general terms for all loan types secured by real property as collateral. These are short term loans lasting for roughly one year, and monthly payments are usually interest-only. If repayment doesn’t happen, the lender sells the collateral property in order to get their money back.
Fix And Flip Hard Money Loans:
In Long Beach, CA, Fix and Flip Loans are very popular for investors due to the hot real estate market. These types of loans mean that an investor borrows hard money from a lender to finance a fix and flip project – buying a property, renovating it, and then selling it for a high profit. When the property is sold, the loan is paid back.
Working With A Long Beach Hard Money Lender – Finance Your Projects With RTI Bridge Loans
RTI Bridge Loans is a hard money lender serving Los Angeles and surrounding booming real estate markets like Long Beach, CA, for the last 15 years. Are you looking to buy an investment property to rent out in Long Beach? RTI Bridge Loans has everything you need to work with when you decide to make the leap. With one of the most substantial economies in the entire country, and the second most populated area in the U.S., Long Beach is absolutely booming, and securing your project in the area is almost guaranteed to leave you with more than you started with. A lot of people look for a Hard Money Lender in the Long Beach neighborhoods to finance their transactions.
So, why a hard money lender in Long Beach? Private Money Lenders in California focus only on a property’s equity and less on the history or credit score of the borrower, the funding process takes as little as a few days, and Long Beach homeownership has become quite difficult. This means that people are focusing on rentals in the area, so many properties are a great investment. Contact RTI Bridge Loans today to learn everything you need to know about the Long Beach real estate market and begin your investment journey today!
What You Need To Know About Long Beach
Long Beach is a beautiful area outside of the greater Los Angeles city, making it a prime target for renters and real estate investors alike. Being surrounded by the largest and most populated city in California (and the second largest in the country), Long Beach is booming in the rental industry. The majority of Californians choose to rent rather than own, making the purchase of a real estate property an amazing investment option right now. Long Beach has a population alone of roughly 500,000, and as more people decide to make the leap and move to CA, expect these numbers to grow. There has never been a better time to invest in rental properties in the fast-growing neighborhoods of Long Beach, CA.