The Top Advantages Of Hard Money Loans
As aforementioned, there are several benefits to acquiring Hard Money Loans. Following are the top 3 reasons why investors choose hard money loans over traditional bank loans.
They Are Fast:
When applying for a traditional bank loan, you not only need an excellent credit score and a good reason, but you also need to have the patience of the Biblical Job (we are talking at least eight weeks of waiting). The case is different for hard money loans. At RTI Bridge Loans, funding takes as little as 3-5 days (14 days maximum). We ensure you have your money ready to finance a new property in the soonest time possible.
They Are Flexible:
Besides being rigid, traditional bank loans come with have stringent guidelines- hard money loans don’t. Though each Hard Money Lending company has its regulations and rules, you only need to jump a few hoops to get the loan. Hard money lenders base their decision on the collateral, meaning you do not have to worry if you lack a perfect credit score.
Hard Money Lenders Help Finance Projects Often Rejected by Banks:
Banks look for specific things when analyzing your loan eligibility and are more likely to reject several financing projects that a hard money lending company would not, including fix and flip loans. Also, banks typically do not offer short-term loans, whereas hard money lenders focus on short-term loans.
Get in touch with RTI Bridge Loans in Torrance at (562) 857-2285 for all concerns or questions you have regarding hard money loans.
Hard Money Loan Disadvantages
Everything in the real world has pros and cons, and many people find hard money loans unappealing for a few reasons discussed below:
» High-Interest Rates:
Because hard money loans are short term, they come with naturally higher interest rates, typically ranging between 9 and 15%. The higher risk involved in hard money loans is another reason why interest rates tend to be higher than conventional loans.
» High Down Payments and Required Equity
Hard money lenders overlook blemished credit or previous foreclosures/bankruptcies because they require borrowers to pay higher down payments or substantial equity in the property they own. Down payments lie somewhere between 25-35%, without which the lender is taking a serious risk if they decide to finance your property.
» They are Short-Term and Last Resort
Often written for only six months to 12 months and highly risky for both investors and lenders, hard money loans are conventionally considered the last resort option. The more the loan term extends, the riskier it gets for the lending company because interest rates can change substantially with time.
Different Types of Hard Money Loans
As previously mentioned earlier, several types of hard money loans are applicable to different projects and funding situations. Contact RTI Bridge Loans at (562) 857-2285 to learn more about hard money loans in Torrance, CA.
» Hard Money Loans:
A hard money loan is a primary term for lending money secured against real property. Short-term and lasting about one year, hard money loans have a high-interest rate, and monthly payments are usually interest-only. Should you default on payments, the lender sells the collateral to recover their money back.
» Bridge Loans:
Bridge loans are tailored to people trying to acquire new property without first selling their old one. Bridge loans serve as a bridge between an old and new property. In this case, you pay the loan in full when you sell your old estate. If you want to relocate without waiting for your old home to sell, a bridge loan could be your best bet.
» Fix & Flip Loans:
Fix, and flip projects involve purchasing a property, renovating it, and then flipping it for a higher profit. Investors often buy the homes at a discount due to their condition, and the renovations may range from necessary improvements to complete reconstruction of the property.
Talking of fix & flip loans, the property involved serves as the collateral. The borrower pays the loan back in full after renovating and selling the property.
Partnering with Hard Money Lenders in Torrance, CA
RTI Bridge Loans boasts over three decades of experience serving hard money loans to the Los Angeles metropolitan area, including Torrance cities. We pride ourselves in offering quick funding in a community where properties are in high demand, considering that banks do not provide the financing fast enough for investors to grab the properties. Contact RTI Bridge Loans today for any questions you might have about hard money loans and Torrance real estate market.
2021-2022 Real Estate Market Trends in Torrance, CA
Torrance real estate offers investors several options, whether they want to invest in single-family homes, apartments, rowhouses, or duplexes. Occupying 53.51% of the city’s housing units, single-family homes are the most prevalent housing types in Torrance, CA. 57.76% of homes in Torrance are owner-occupied, while 45.24% are renter-occupied.
As of January 2021, the median home listing price in Torrance was $827k, up by 3.8% from January 2020. The median listing price presently per square foot is $529. However, Torrance homes’ current median sold price is $835.4k, equating to a sales-to-list ratio of 100.64%.
The median list price for single-family homes, condos, and townhomes in Torrance are $929k, $499k, and $787.4k, respectively.
In January 2021, the average rental rate in Torrance, CA, is $1,319 for studio apartments, $1,968 for 1-bedroom apartments, and $2,707 for 2-bedroom apartments, and $2,771 for 3-bedroom apartments.
Torrance housing market is presently a seller’s market, meaning that the demand for properties exceeds the supply. This makes 2021 the absolute best time to invest in Torrance real estate market. Contact RTI today at (562) 857-2285 for reliable hard money financing and more information about the city’s housing market.
