Category Archives: Hard Money Loans

Top 6 Reasons Why Use Residential Hard Money Loans?

Category : Hard Money Loans

Residential hard money loan is essentially a non-bankable loan on an investment single family home or duplex. This is one of the best financing methods for residential buyers to purchase homes in need of renovation and rehabilitation under terms that are more flexible than traditional, long-term mortgage loans. For a residential hard money loan, the underwriting decisions are based on the borrower’s hard assets. In this case, the lender uses your real estate as collateral for the transaction and you can find yourself with a loan in as short as 3 or 4 days depending on circumstances.

Residential private money loans can be used in a wide variety of buying situations, but here are the top 6 reasons why use residential hard money loans:

1).    Buyers have damaged credit histories

2).    Homes don’t meet the requirements of FHA lenders.

3).    Buyers want to turn non-conventional properties into homes.

4).    Traditional lenders are unable or unwilling to finance fix and flip loans.

5).    Buyers have a mortgage on another residence.

6).    Buyers need to finance purchases quickly.

Residential hard money loans are utilized by many different types of borrower’s cause of its flexibility. Many investors who opt for these types of loans do so because they find properties that they want to buy and don’t have time to wait for approvals through traditional financing institutions. Other investors opt for private financing because they want to buy properties that must be rehabbed or are viewed as high risk by lenders due to their location or use history. Individuals who have been through foreclosure or bankruptcy may also be able to use these types of loans to purchase residential property.

The Bottom Line

A residential hard money loan is a good alternative to traditional bank financing. This alternative financing is beneficial to the borrower in many circumstances. If you want to buy a distressed property or want to get back on track after a foreclosure, a private financing might be a good choice. With careful, advanced planning, private financing can provide for an excellent return on investment.

Magna Capital Group, Inc is a leading residential hard money lender; we understand that sometimes circumstances can make it difficult to qualify for a bank loan. Our residential hard money loans provide you with the fast funding and loan terms that you need to help you reach your real estate goals.

Visit our “Residential Loans” tab for various residential loan programs and investor requirements, or Contact Us Today at (323) 655-6888.

 


Six Significant Advantages for Real Estate Investors Using Hard Money Loans

Category : Hard Money Loans

Most of the times real estate investors need quick financing to close their deal’s, they use private loans in order to avoid missing out on the real estate deal. Private loans, often referred to as hard money loans or bridge loans, offer significant advantages over conventional or bank-financing arrangements. Hard money loans fund quickly within a flexible structure and without prepayment penalties that can unintentionally hinder the success of your real estate business.

 

Hard money is a type of short-term loan secured by real estate. The loan terms are generally around 12 months, but longer terms of up to 5 years are available in some situations. You can get loan based on the value of the property being used as collateral. Although you get up to 75% of the value of the property. This ratio of the loan amount to the value of the property is commonly referred to as the LTV (loan to value). The main benefit of hard money loans over traditional lenders like banks is the ability to quickly approve the borrower and fund the loan. Hard money loans approve and fund faster than it takes the bank to realize they have a new loan application! Hard money loans are collateral-based, the application process focuses less on the borrower’s income, credit scores, or issues like recent foreclosures, short-sales or bankruptcies. When the banks are all saying “No”, hard money lenders can still say “Yes”. You can apply for hard money loans for any type of property including single-family residence, multi-family residence, land, industrial and commercial.

 

Now after a quick overview of hard money loans, here are 6 big advantages that real estate investors are able to benefit from when using hard money.

  1. Fast funding so deals aren’t missed out on: Many properties, especially distressed properties, need to be put under contract and closed quickly. Fast funding helps investors to avoid missing out on the deal. Hard money loans generally fund into 5-10 days, but if there is a very urgent need to get the funds sooner the hard money lender able to finance the deal even quicker.
  1. Negotiating lower purchase prices or other beneficial terms: A property owner who needs to sell their property quickly will be more likely to negotiate with a buyer who can offer a quick close. This puts an investor into a position of power when they offer a quick close with a hard money loan. This can help the investor with negotiating a lower purchase price or other favorable terms.
  1. Getting an offer accepted over competing bids: An offer on a property with hard money financing is stronger and increases the likelihood of being accepted when compared to an offer with traditional bank financing. An experienced seller (or experienced agent representing the seller) understands that hard money lenders are able to fund quickly and much less likely to encounter a last minute issue that would prevent them from funding the loan during escrow. Banks have a bad reputation for sometimes stumbling across some small detail about the deal that causes them not fund the loan.
  1. Using leverage in order to do more deals: Paying cash is a great strategy for getting an offer accepted at a better price and saving on lending costs. But paying all cash has its drawbacks as well. If too much of an investor’s cash is tied up in one or two deals, they risk not being able to pull the trigger on a new opportunity that arises while the other deals are in progress. An offer with hard money loan allows an investor to provide a better offer than traditional financing while still keeping enough cash on hand to act on an opportunity that may be around the corner.\
  1. Pulling equity from existing properties to put it to work elsewhere: While having a high amount of equity in a property is positive thing, that money may be able to get higher returns if reinvested in a different project. A hard money lender can quickly process a hard money cash out loan for an investor. The funds can then be reinvested as a down payment on a new purchase or used to improve an existing property.
  1. Obtaining financing when at the max for conventional loans: Many banks allow an investor to have only four financed properties. Hard money lenders do not have these types of arbitrary restrictions. The hard money lender will be able to provide funding regardless of the amount of financed properties an investor has. The hard money lender will primarily be concerned with the amount of equity the investor will have in the new subject property.

Conclusion

Hard money loans have a lot to offer real estate investors who can’t afford to miss out on deals due to slow financing. Hard money really shines in the areas where the bank loans fail miserably, speed of funding and flexibility.

Magna Capital Group, Inc. is a hard money lender in Los Angeles, California with over 30 years of experience. For more information about our loan programs or to inquire about a loan call (323) 655-6888 or email at info@magnaenter.com.


Hard Money Lending – The best way to save your project!

Category : Hard Money Loans

When you need outside financing support for your project you generally go for hard money lenders or banks. Both methods of financing projects are commonly used but procedures are completely different which could affect the outcome of your project! Time is money on a construction site so the quicker you get your money the better the outcome could be.

Identify and approach your situation

It is important to identify the situation you are in to be able to choose the best financing option for your needs. If you need fund frequently but have poor credit or no credit at all, hard money loan would be the best option for you. Hard money loan always works for quick and flexible financing needs. Hard money is a short-term loan that you can close within six months or less. There is less paper work required in hard money loans because the only information generally needed is property value and the investor’s information.

The change can be very positive and worth it!

There are many cases where investors need quick financing but they don’t get it in time and suffer big losses from that. This usually happens when the loan is applied through banks, as they require much more paperwork and time to review a list of factors that determines your qualifications. This is not a very appealing route for many people as they generally assume they will be declined after all the paperwork asked by the bank.

The deciding factors can be the condition on the property and how much risk is going to be taken in working with that company. Hard money loan specialists will work with you further in-depth and be more considerate of your situation for a higher rate in return on their fee due to risk. The most positive impact a hard money loan can have is saving a project!

Conclusion

You can save your project with hard money loans even if you have bad credit score or ineligible for standard mortgage loans. Hard money loan procedure is significantly faster than bank loans because there are very less paper works required. You can get fund quickly to save your project.

Magna Capital Group, Inc. is a hard money lender in Los Angeles, California with over 30 years of experience. For more information about our loan programs or to inquire about a loan call (323) 655-6888 or email at info@magnaenter.com.


Reasons Why Real Estate Investors Prefer Hard Money Loans!

Category : Hard Money Loans

Hard money is a type of financing used to finance properties for short-term. Nowadays hard money is a

great option for investors to fund real estate deals. If you have a bad credit score and planning of

getting a home loan, the chances of you getting the loan is very slim. Nowadays getting approved for a

home loan has been a challenge. Standards on lending have been tight which means if you don’t have a

good credit score or if you don’t have enough income and resources, you’re bound on getting

disapproved for the loan.

Residential hard money loans provide you with the fast funding and loan terms that you need to help

you reach your real estate goals. Terms of hard money loans are more flexible rather than traditional or

long-term mortgage loans. The advantage of a hard money loan is you can get the entire amount of

money you will need to complete a deal. Although most hard money-lenders loan 65 or 70 percent of

ARV; that is not the purchase price, that is how much the house will be worth once you fix up the

home.

Hard money lenders are well known on bridging the gap missed out by traditional lenders. That has

been the reason why they have become well known option for investors nowadays. Hard money

lenders, unlike traditional lenders, place little weigh on credit score. The focus of the hard money

lenders are on the property fundamentals and equity position. Though do expect that hard money loans

will cost higher compared to traditional loans, although if you’re an investor eyeing on a great

investment opportunity, hard money has lots of worth for you.

Which to choose – traditional or hard money?

While considering and checking which you should choose, if you’ll go the traditional or hard money,

here are pointers that might help you:

Traditional loans rates are really low. If you are able to get a traditional loan, than you are starting off

with a big advantage. Only the process of getting it is really difficult almost impossible if you have low

credit score. Also, there are lot of documents requirements in traditional loans. The process of

traditional loans usually take more than 30 days.

On the other hand, hard money loans do not really put much weigh on you credit score. The focus is

on the equity and property fundamentals. Rates are higher compared to traditional but the good thing is

if you are an investor, you can get an access to the funds on a very short time or may be in a day. The

process of hard money loans take not more than 5 days.

Conclusion:

If you have a bad credit score and hungrily need fund to fix your real estate deal, don’t waste your time

into getting traditional loans because it’s almost impossible with bad credit score. In this situation, only

hard money loans can help you to fix your deal quickly. Don’t be afraid to finance real estate with hard

money if that is your only option.

For more information about hard money lending, visit our website MagnaLoans.Com or call us today

on (323) 655-6888 or send us an email at info@magnaenter.com


Valid Reasons to Use Residential Hard Money Loans

Category : Hard Money Loans

Whether you’ve been going through a foreclosure in the recent past or want to buy an unconventional property to turn into your dream home, finding financing can be a real struggle for you. Even qualified borrowers can find it difficult to secure the loans that they need in order to buy residential properties in today’s market. For investors and borrowers who don’t meet conventional lending requirements, finding financing might even seem impossible. Thankfully, hard money loans are a viable option for residential buyers with unique needs. Hard money loans also known as equity-based or private financing which have long been used by real estate investors who want to purchase properties traditional lending institutions won’t finance. However, hard money loans can also be used by residential buyers who want to purchase homes or investment properties.

 

Residential private money loans can be used in a wide variety of buying situations. Although, some believe that these types of loans are only for those with poor credit, but that simply isn’t true. Here are some other situations when property buyers use residential hard money loans:

 

• Homes don’t meet the requirements of FHA lenders.

• Buyers want to turn non-conventional properties into homes.

• Traditional lenders are unable or unwilling to finance fix and flip loans.

• Buyers have a mortgage on another residence.

• Buyers need to finance purchases quickly.

 

Who Uses Residential Hard Money Loans?

 

Hard money loans are utilized by many different types of Borrowers because of its flexibility. Many real estate investors prefer to use hard money loans because they find properties that they want to buy and don’t have time to wait for approvals through traditional financing institutions. Other investors opt for these types of loans because they want to buy properties that must be rehabbed or are viewed as high risk by lenders due to their location or use history. Individuals who have been through foreclosure or bankruptcy may also be able to use hard money loans to purchase residential property.

 

Buyers who are considering using a private lender enjoy options that traditional lending institutions don’t offer. Whether you want to buy a distressed property or want to get back on track after a foreclosure, a private financing might be a good choice. With careful, advanced planning, private financing can provide for an excellent return on investment.

 

Conclusions: Hard money loans meet requirements in all kinds of buying situations. The advantages of easy access, flexibility, convenient requirements and rapid processing allow you to purchase residential or commercial properties quickly. For additional queries, call Magna Capital Group, Inc at (323) 655-6888 or visit https://magnaloans.com/beta/ today.


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    Although Magna Enterprises, LLC and Magna Capital Group, Inc. are referred to throughout the text of this website as Magna Group of companies, they are not affiliates, parent or subsidiary companies as both companies are separate and distinct entities. Any questions or issues regarding this disclaimer should be addressed in writing c/o Shawn Molem.