Today mortgages and other financing tools are responsible for the nearly 30 trillion dollars of value in Real Estate throughout the United States. With this number growing and home values going up 5% in New Jersey over the last year there is certainly an opportunity for many new and experienced investors.
Hard Money was initially defined as, "Loan that is defined by a physical asset." Things are starting to change and evolve however. Many Lenders that offer this niche mortgage product have since changed the whole game by offering higher percentages up front to help people buy, renovate,and even refinance homes.
I sat down today with local lenders based right here in Teaneck, New Jersey. We spoke about some of the benefits of this industry.
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Benefits of using a Hard Money Lender:
1. Quick Close of a Loan/Time Crunch
Typical Mortgage bank loans can take upwards of 50 days to close. These type of lenders can close transactions in less than 10 days. This can allow investors to build their portfolios extremely fast or even help them to meet deadlines that a bank can't.
Find out what's happening in Teaneckfor free with the latest updates from Patch.
2. Ability to see value beyond a credit score
If your credit score is bad a bank wont even look your way, but not for hard money lenders. If your investment or project makes sense they will work with you to get the money you need.
3. Financial leverage
Using funds from a lender can help you acquire more assets, especially if you're starting to run out of personal investing funds. You can use OPM (other peoples money) to build equity in your own portfolio.
4. Added Value
With reimbursement processes such as construction draws, it allows builders and contractors to add value to home and get their money back. This a major benefit because with the renovations and repairs being done to the home, the value of the home increases and you get your money back. It truly is a win-win.
