Disadvantages of Hard Money Loans
High Down Payment and Equity
Hard money lenders in Venice, CA, may overlook negative events in your financial history, but they demand higher down payments or equity on the property. Down payment for hard money loan typically range between 25% and 35%
Higher Interest Rates
Because hard money loans are riskier than conventional bank loans, lenders charge much higher interest rates. Interest rates for hard money loans in the US average is 11.25% and range between 7.5% and 15%. Compare the figures with the current 30-year fixed-rate average of 3.04%.
Short-Term and the Last Resort
Hard money loans carry a higher risk for both investors and lenders, typically lasting a year. These factors combined with high-interest rates make hard money the last resort for investors who cannot access home loan financing.
Types of Hard Money Loans Available in Venice, CA
Hard Money Loans
A hard money loan is short-term funding secured by a property. These loans typically last about 12 months and attract higher interest rates because of the perceived risk. Often, lenders require borrowers to pay interests monthly and the principal amount at once at the end of the term.
If you wish to buy a new home before selling your existing home, a bridge loan may be your best option for funding your next property.
A typical scenario for bridge loans is where an individual borrows the difference between their current mortgage balance and a maximum of 80% of their home’s value. The borrower uses the second loan to pay the down payment for their second home and pays off the first mortgage when they sell their first home.
Fix and Flip Loans
Property flipping involves buying a discounted house at auction, rehab the property to the best possible condition, and sell it at a profit.
Fix and flip loans help investors cater to the expenses related to the above steps and cover property ownership-related expenses (think utilities and homeowner’s insurance).
Borrowers are often allowed to pay the accrued loan amount (principal amount + interests) in a lump sum when they flip their properties.
Partner with a Professional Hard Money Lender in Venice, CA
RTI Bridge Loans boasts over thirty years of experience offering hard money loans to investors in the Los Angeles metropolitan area. We pride ourselves on providing reliable and quick funding to help investors expand their investment property portfolios.
With our seamless financing option, you can readily tap into hot markets and quickly generate the profits you need to sustain and grow your investment. Should you have any queries regarding Hard money financing in Venice, CA, please contact us at (562) 857-2285.
Venice, Ca Real Estate Market Trends
Venice is a densely populated urban neighborhood nestled in the Los Angeles Westside region. It is a tight-knit neighborhood with charming streets, excellent walkability, plenty of fantastic restaurants, an enviable location on the ocean.
AreaVibes estimates that the cost of living in Venice, CA is 59% higher than LA’s average and 143% higher than the national average.
Venice CA Real estate market ranks among the priciest in the country, outranking 97.8% of California neighborhoods and 99.6% of the USA’s communities. On the flip side, it has a median household income of over $104,000.
Studio to two-bedroom apartments and three-four bedroom single-family homes are the most prevalent housing units in Venice, CA.
Presently, homes for sale in Venice range between $535k and $12.5m. In April 2021, the city’s median home list price was $2.49m, up by 10.7% from last year. The median home sale price was $1.935m, while the median list price per square foot stood at $1,100.
The average rent in Venice, CA, is higher than nearly 74% of California neighborhoods. According to Apartments.com, renters can expect to pay an average of $2,287 per month. The average rent for studio, one-bedroom, two-bedroom, and three-bedroom apartments is $1,568, $2,287, $3,029, and $4,224, respectively.
To learn more about the Venice housing market and get reliable hard money loans, call RTI Bridge Loans at (562) 857-2285.