Investing in real estate can be done passively through crowdfunding and Real Estate Investment Trusts (REITs). However, if you are looking to go into real estate investing without putting in a lot of your own money, you should consider private money lenders in Houston as your answer. They offer hard money loans that have several advantages over conventional financing but as it is with everything else, they have their disadvantages as well.
Bridge loans are actually short-term loans that can be used by real estate investors to finance their projects. The main people who use these types of loans are real estate developers and house flippers who may use the loan to develop the property or to renovate it before they sell it at a profit. Private lenders like Noble Mortgage & Investments offer hard money loans and other financial help. In order to qualify for a loan, your creditworthiness is not the main criteria, but the value of the property. Mostly, they look at ARV (after repair value) in order to determine its value and the loan amount to give.
Private Money Lenders in Houston Offer Loans with the Following Advantages:
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Convenience
If you apply for a loan with conventional banks, it can take you many months to close. The convenience of hard money loans is that you can get the loan approved within a few short weeks. If you are working with a timeline and cannot afford to have delays, then the convenience is ideal.
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Flexible terms
Commercial hard money lenders are usually open to negotiate terms. Depending on your needs, it is possible to speak with them and tailor repayments based on a convenient schedule. Sometimes you may even be able to get different fees reduced or completely removed.
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Collateral
Usually you don’t have to worry about getting some other form of collateral in order to get the loan. The property becomes the collateral. In some cases, a lender may be okay with you using a personal asset as collateral. For example, your home or a retirement account can provide the value equal or greater than the amount you are borrowing.
The Disadvantages of Houston Hard Money Loans Should Also be Considered.
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Rates
Many times, the interest rates are higher than what you would get at your bank. Additionally, the loan servicing fees, closing costs, and origination fees are also more in most cases.
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Repayment period
The repayment period tends to be much shorter than that of traditional mortgages. You should therefore have a good grasp on how soon you property will begin turning a profit so you can repay your loan within the given timeline.
Let’s Discuss Your Financing Needs, call Noble Mortgage & Investments today.
