If you are thinking about investing in real estate, you may want to consider a hard money loan to help you acquire and rehab the property. Hard money lending is very vibrant these days and there are some pros and cons you should consider as a real estate investor.
- Hard Money Loans take into consideration the After Repair Value (ARV) which means you can get a hard money loan that provides all the funds you need to purchase a property. You only need to have the funds for rehab.
- Interest is assessed during the term of the loan - typically six months maximum - but you have no payments due during the loan period. So you are truly using your available funds for rehab and planning for a balloon payment using the proceeds from the sale to new buyer.
- Qualifying can be much easier than qualifying for conventional financing.
- Hard Money Loans is very risky. If you cannot pay them back, you are looking at a foreclosure.
- Hard Money Loans have interest rates that are comparable to credit cards - 18% or more.
- Hard Money Loans have other fees that must be taken into consideration as part of the overall cost of the loan.
- Most hard money lenders only lend on investment properties. If you are looking to purchase as an owner occupant meaning you will live in the property, get approved for a conventional loan first. Use it after you have completed the hard money loan.
Interested in investing in real estate in metro Atlanta? Please give our office a call at 404 923 4210 for immediate assistance. We have helped investors in the area who are very successful.
Office 404-418-8092 Cell 404-246-3210 Fax 404-991-3770