what is a hard money loan

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what is a hard money loan

September 11, 2015

Investing in real estate is a great way to build long-term equity and earn some additional interim cash flow. When you are looking to purchase real estate, you may need to get financing to do so. One type of financing that you should consider getting is a hard money loan, from Delancey Street.

What is a Hard Money Loan?
A hard money loan is a type of loan that is secured by real estate. This type of loan differs from a traditional mortgage a few different ways. One of the main ways that it differs is that it is normally provided by an individual investor, finance company, or investment fund, as opposed to a traditional bank. Along with this, a hard money loan normally does not have the same requirements as an investment loan mortgage, which means you can normally get one with less money down and there are less regulatory requirements.

Benefits of a Hard Money Loan
There are a variety of benefits that come with hard money loans, as opposed to traditional investment real estate loans provided by banks. One of the main benefits of a hard money loan is that you normally will not have to put forth as much equity as you would with traditional investment real estate loans. While a bank may require that you put forth a down payment of 25% or more, a hard money lender could provide you with higher levels of financing. This frees up a lot of additional equity and can boost your IRR.

Another advantage of a hard money loan is that they do not have the same regulatory requirements as traditional bank loans. This means that you may not have to guarantee the loan or go through as many hurdles that come with getting a traditional loan. Because of this, hard money loans can normally be funded faster and lenders can be more flexible with terms, which could align better with your business plan. This can make them a great option depending on what you plan on doing with the real estate.

Drawbacks of Hard Money Loans
While there are clear advantages of taking out hard money loans, there are drawbacks as well. One of the main disadvantages is that they are more expensive. Since hard moneylenders do not have the same cost of funds, they will normally have to charge you a higher interest rate and more fees than a traditional bank. This can make them more expensive, especially when the loan balance is higher if you do not put forth as large of a down payment.

Another disadvantage of a hard money loan is that your terms will normally be much shorter. When you take out a traditional loan, you may be able to get a term that is as long as 30 years in length with a fixed interest rate. When you borrower from a hard money lender, you will normally have to repay the loan much quicker than you would with a traditional loan. In many cases, hard money loans are considered a form of bridge financing that will have terms of no more than 3-4 years.

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He is a great lawyer, life saver, always available, down to earth and very respectful. Thanks a million for what you did for my family. We will always remember you and I continue to pray for your blessings to help others.

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My boyfriend visited the state of NYC for the first time & was falsely accused of burglary. He was striped of his rights & was being framed by the NYPD. He went ahead and hired Mr. Tsigler within

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The Law Offices of Robert Tsigler is determined to get the job done. They delivered amazing results in my criminal case. I am happy to have my life back and cannot thank them enough.

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Unfortunately, I have had the need for a few attorneys in my life. Robert is the best attorney I have hired. He knows exactly what he is talking about and knows how to execute properly. I would definitely hire him again.

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Rob is a truly great criminal defense attorney whom I would recommend for his expertise, contacts, and communication-style.

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I hired Robert to defend me in a case where the cops arrested me for something I didn’t do. I was really worried and angry that I was arrested for something that wasn’t my fault. Robert told me to relax and that he would handle everything. He kept his word and got all the charges dropped!

~ Anonymous Joe

He is very knowledgable and reassuring, providing a person with a sense of confidence and “peace of mind”. Thank you very much for your help Mr. Tsigler!

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I retained Robert Tsigler to help me with a criminal case. He exceeded all my expectations and was able to get a great resolution for me. He always made sure that i understood everything that was going on and his fee was reasonable. He was highly respected by the district attorney.

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Robert was very effective in resolving an immigration matter for my family. The previous attorney we were dealing with gave us the run

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The law offices of Robert Tsigler really helped put my mind at ease. They were very responsive to my calls and fought hard for a great outcome to my case.

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