Private Money Loans Are an Option for Real Estate Investments
Private money loans come to the rescue when traditional funding sources dry up.
As a real estate investor, this form of alternative financing services two distinct purposes.
If you have money that’s idling, you can lend it out for secure returns. If you need money to invest in a project, you can borrow private money loans from other investors.
This type of alternative funding is the glue that makes up many lucrative deals.
Get a Great Return on a Secure Investment
There are many ways to finance California real estate. One common option is using a hard money lender. Homeowners and investors commonly use these types of loans to get the money they need to close quick on a property. Hard money lending is a way for investors to get a safe return on their money. It’s also a way for home buyers to get approved to buy their dream properties.
Discover Steady Returns Made Easy
For investors, the process of lending hard money is easy. They go through a company that specializes in this type of alternative house funding. Investors enjoy the fact that a first trust deed on real property secures their investment.
The loan to value ratio is kept below 65% to ensure that there’s nothing overly risky going on. Most investors are well aware of the problems that happen with risky real estate investment. The downside rarely emerges when intelligent underwriting is used, along with wise capital requirements.
That’s one reason that hard money lenders in Los Angeles have been picking up in volume in recent years. When a fully-licensed escrow company that carries all the required title insurance closes the loans, there’s little chance that something is going to go desperately wrong.
Look for a company that does not demand a minimum investment. In that scenario, you’re okay to start small and add to your investment pool as time passes. There’s no reason to put all your money in at once until you see how the entire process goes.
The Joy of Secure Investing
You’re going to love getting monthly disbursements from your interest payments. Third-party companies handle all of the loan servicing. If you demand money savings on that, you can consider doing the loan servicing yourself.
Most people opt to let the loan servicing company handles all that heavy lifting. In this case, you don’t have to deal with the home buyer at all. You just get paid regularly! You’ll love this streamlined process.
Private Money Loans Help Build a Strong Economy
Some even re-invest all of the interest payments they receive. Keep in mind; the property itself protects the investment. If the property is high quality with a high resale value, the loans are very secure.
If you’re ready to earn a steady stream of income from an investment, consider the hard money lending option. It’s working for many people in your same position and could easily work for you. Security means everything when it comes to making investments.
You need to deal with a company that has solid underwriting and sound investment practices in place. In this scenario, you’ll do very well. You don’t want to gamble when you can make steady returns at all times. All it takes is dealing with experienced professionals who understand the game and are there to help you earn a steady return.
If you use a fix and flip investing strategy, you’ll probably use private money loans. If you’re a “buy and holder” you may want to lend yourself.