Investing in real estate can be a great option. Those that are savvy investors and are able to find value could earn significant returns on their investment. One challenge that is posed to those that do want to invest in this industry is that it does require a significant amount of capital to purchase, renovate, and market their real estate assets. When you are looking to invest in real estate, a great financing option would be to take out a hard money loan from direct lending services. In short, this will give you the capital that you need to purchase the real estate asset, as well as renovating and selling it. Once it has sold and you have hopefully made a profit, you can then use that money to pay off the loan. It makes perfect sense, which is why so many aspiring real estate investors are looking for commercial loans in Florida and other popular states across the U.S. Here are just some of the advantages that come with this financing option.
Quicker Process
One advantage of getting a hard money loan through a direct lending service is that it can be a much quicker process. When taking out a mortgage or commercial real estate loan from a traditional bank, the process can take a long time. Between providing a loan application package, ordering appraisals and other reports, and waiting for approval and funding, it could take months to get a loan from a bank. However, the hard money lenders can be much more nimble and close a loan in a much shorter period of time. This flexibility can make your bids more attractive to potential buyers.
Higher Leverage Options
For real estate investors, having access to higher leverage is very important and can almost always help you earn a higher return. With traditional banks, those that are looking to purchase any type of investment property will need to put down at least 20% equity. If you take out a loan from a hard money lender, the equity requirement will be much lower as lenders are often willing to finance up to 90% LTV.
Variety of Loan Options
While investing in real estate is a common form of investment, the type of investment that people make can vary from one person and situation to the next. Some common forms of investments can include purchasing a multi-family property to lease out, purchasing a single-family home to purchase, and then flip or a variety of other strategies. With a direct lending service, you can get a loan that will match the needs of your business plan.
Looser Credit Standards
Getting a mortgage from a traditional bank or mortgage provider will always come with a diligent underwriting process that will include having a specific mortgage and income requirements. This could make it hard for a lot of people to qualify for a loan. However, with a direct lending service, the underwriting standards are a lot looser. While there will be a loan evaluation process, there are not rigid rules around income levels, credit scores, or even if you have a history of bankruptcies or foreclosures.
If you are looking to make a real estate investment, you should consider using the services of direct lending services. These real estate financing services can provide you with convenient and flexible access to the capital you need to make your next purchase or investment.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin