Are you a real estate investor - or looking to start investing in real estate? If so, financing is likely at the top of your list. California hard money loans for investment property is one direction many investors choose to go when looking to finance their real estate endeavor.
There are many reasons to choose hard money loans when investing in California real estate. First and foremost is the financing aspect. Real estate is a fairly unique investment opportunity with regards to the ability to use leverage. Taking advantage of this ability to leverage their cash available is how many real estate investors are able to make outsized gains when compared to other business opportunities.
While leverage is a reason to use financing, we have to dig a bit deeper to see why hard money loans in California should be in your toolbox. A lot of the why's to this question have to do with the specific transaction type and/or your personal credit and financial profile. If offered two loans - one conventional and one hard money - the conventional loan is very likely to be the best choice most of the time. It's less expensive and will offer better terms. Hard money loans are there when conventional financing is not an option.
One such scenario where conventional financing may not be an option is when doing fix and flip transactions. The condition of the property may not allow for conventional financing - while a hard money loan for rehab is custom made for properties in need of repairs, both major and minor. In addition, the leverage offered with a hard money rehab loan could be higher. This is due do the hard money loan being based on a loan to value ratio that uses the after-repair value of the property rather than the purchase price.
Another scenario where conventional financing may not be an option is when buying distressed commercial properties. Vacant commercial properties, properties with vacancies, properties in need of repair and/or other distressed situations can be difficult to obtain more bankable financing on. Many bank loans for commercial properties will require the property to debt service. In a distressed situation, or a vacant situation, that may not be possible. A hard money loan can be a great solution, allowing you to acquire the property, reposition it and then sell or refinance to exit the hard money loan.
Land is another common transaction that can require hard money loans in California. Land can be very difficult to finance. Often it requires a large down payment and a minimum loan amount. With hard money, however, we can work with seller carry back situations or cross collateral to reduce the down payment requirement. We can also help finance small land loans - all the way down to $30,000 in some scenarios. In addition, hard money can help finance land that is unentitled, or in the process of being entitled. We actually help finance a lot of land these days of all shapes and sizes!
There are many other reasons you may consider California hard money loans for investment property. We can help with many hard money loan requests in California - including seconds and even thirds in the right situation! We are always happy to discuss scenarios and brainstorm how we might structure financing for a challenging project with merit. Feel free to call at 877 462 3422, visit us on the web or email us if you have questions about California hard money loans!