You and your friend are strolling down the street, enjoying a leisurely walk with your dog. As you reach the end of the block, a charming Tudor home captures your attention. There’s no denying its former grandeur, but it’s clear that a little tender loving care (TLC) could transform it into something extraordinary. You may be tempted to call your band as you envision the untapped potential of this property. However, in most cases you use hard money lenders instead. Hard Money lenders know exactly how to handle this kind of situations. When it comes to purchasing an investment property, it’s crucial to choose the right lender. Hard money lenders are your ideal partners in this venture; we’re here to tell you why.
Let’s quickly review the basics. Hard money loans are short-term financing options specifically designed for real estate deals. These loans are often provided by hard money lenders, also known as private lenders. The repayment terms typically span 1-3 years, during which you make interest-only payments. The principal amount is settled when the property is sold.
Timing is everything, particularly in the world of investment properties. As you may have experienced, banks can be frustratingly slow. It’s not uncommon for them to take up to 45 days to approve a loan. In that time, another savvy investor might have snatched up the property and commenced renovations. Here’s where hard money lenders shine: they expedite the approval process, giving you an edge in the market. With loan approvals often granted within 1-2 days and funding swiftly following within the week, it’s safe to say that your bank can’t match this level of efficiency.
When you purchased your own home, you likely secured a mortgage lasting anywhere from 15 to 30 years. Banks prefer longer loan terms for two reasons: they have confidence in borrowers’ ability to make payments over an extended period, and they benefit from the accruing interest. However, consider this scenario: you manage to secure a bank loan just in time, invest significant time and resources into refurbishing the property, and successfully sell it. But then you receive disheartening news—you still owe money. How could this be?
According to Nasdaq.com, banks often penalize individuals for early repayment, imposing burdensome exit fees. These charges are typically based on the remaining loan balance. So, if you complete the renovations swiftly and the property sells quickly, you could find yourself paying thousands of dollars in exit fees.
Enter hard money lenders, who do not subject you to such fees. They anticipate short loan durations from the outset and understand that you’ll settle the debt expeditiously. That’s why during the loan term, you only pay interest, and the principal amount is repaid upon property sale. It’s a fair and transparent arrangement that allows you to avoid unnecessary expenses.
Traditional banks tend to play it safe and avoid risky investments unless they are guaranteed favorable outcomes. When they assess a property you intend to renovate and flip, they focus on its current condition—rotting wood, broken windows, and even mold in the bathtubs. They struggle to envision its potential.
On the other hand, hard money lenders possess a unique vision. They see beyond the dilapidation and envision the remarkable transformation that awaits. Just like Chip and Joanna from “Fixer Upper,” who passionately discuss their future plans for each property they showcase, hard money lenders recognize a property’s ability to change. They possess an innate ability to see through imperfections and identify the hidden marvel within.
That’s precisely why hard money lenders are more likely to approve loans for investment properties. They understand the value of potential and are willing to take calculated risks to support your vision.
If you’re ready to embark on your investment property journey and experience the unparalleled advantages of working with hard money lenders, then Gauntlet Funding is your Answer. We are a leading hard money lending company based in New York, dedicated to helping investors like you achieve their real estate goals.
What sets Gauntlet Funding apart is our commitment to providing prime borrowers with the most competitive rates in the market. We prioritize transparency and maintain an organized system that ensures a smooth and efficient funding process. With us, you won’t encounter any prepayment penalties, allowing you to focus on maximizing your investment returns.
Our team of experienced professionals is ready to guide you through the approval process, making sure you receive the financial support you need without unnecessary delays or complications. We believe in the potential of investment properties, and we’re here to help you unlock that potential.
So, if you’re intrigued by the possibilities offered by hard money lending, reach out to Gauntlet Funding today at (917) 397-2752.
Why Should I Use Hard Money Lenders? | Gauntlet Funding – Melville, NY