Category Archives: Hard Money Loans

Hard Money Loans – The Fast And Easiest Way To Finance Fix and Flips Projects!

Category : Fix & Flip Loans , Hard Money Loans

Fixing and Flipping Houses have become a very profitable business today, but it costs a lot of money to fix and flip houses. Real Estate Investors need lots of capital to purchase and renovate a house before they can flip the house for a profit. In addition, they need to pay contractor fees, listing and broker fees, holding costs, and much more. House Flippers find hard to qualify for traditional loans cause of their strict lending regimes. Luckily, there are hard money loans options available for them. Hard money loans are the most useful and fastest way to get money for investors who are new to fix and flips or who have tarnished credit. Hard Money Loans are most suitable for experienced or inexperienced flippers who need money quickly. Fix and Flip Investors typically use hard money loans to purchase and renovate a property for flipping.

Why are hard money loans better than bank loans for Fix and Flip funding?

  • Hard money loans are faster & flexible compare to traditional bank loans. It usually takes 24 hours for loan approval and 5-10 days for funding.
  • A hard money loan is a short-term loan secured by real estate that can be used to purchase, renovate, and sell a property within 1 year.
  • Hard money loans offer easier qualifications compare to all other financing options. Novice home flippers can also get qualify for hard money loans because hard money lenders care more about the property and its potential value than about the borrower’s experience or financial qualifications.
  • The credit score is not the primary factor in hard money loans. Hard money lenders prefer to take look more at the collateral and borrower ability to pay. On the other hand for banks, credit score is the primary factor to make the decision for loan approval.
  • In the case of hard money loans, borrower’s income is of lesser concern, for traditional loans borrower must have good credit with documented income.
  • Hard money lenders offer very flexible terms to Investors which suits their financial situations.
  • Hard money lenders offer up to 70% amount of after-renovation value (ARV). For example, if a home costs $50,000 but the ARV is $100,000 then you can borrow $70,000. After paying the $50,000 purchase price, you’ll have $20,000 left for closing costs, lender fees, rehab, carrying costs and selling expenses such as staging, marketing, and real estate agent commissions. If you can stick to that budget, you won’t need any money out of pocket to flip the home.
  • A hard money lender typically charges between 11 and 18 percent interest and 3 to 10 points. For bank loans, the closing costs usually 2-5% of the total loan amount.
  • There is no prepayment penalty in hard money loans.
  • Hard Money Loans work for both experienced and inexperienced fix and flippers finance investment projects when whereas banks only work with inexperienced house flippers.

The Bottom Line:

If you’re looking to tap into the growing real estate market for your personal financial interests, but your credit score is entangling your efforts, you can utilize hard money loans to buy a house that needs some work and later you can resell at a good appraisal value. A hard money loan is good for the experienced and inexperienced fix and flippers. With the real estate market expanding by leaps and bounds every single year, many real estate investors are keen to get their portion of the market share. Property prices are on the rise, hence savvy investors can buy low, and sell high to make a good profit.

Magna Capital Group, Inc is one of the most experienced and trustworthy hard money lending companies across California which helps its clients in many different types of situations realize their property ownership dreams. We provide fix and flip loans to experienced and inexperienced fix and flip investors on attractive interest rates with no prepayment penalty.

For specific information on whether or not a hard money loan is right for you, please feel free to call us today at (310) 734 4044 or email at info@magnaloans.com. We will provide our full support to make your fix and flip projects successful.

Hard Money Loans – The Best Way To Finance Home Construction Projects!

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Category : Construction Loans , Hard Money Loans

If you are planning to build a new home but not sure how to finance it, hard money loans would be the perfect choice for you. It’s the best suited for availing finance in order to construction home or for remodeling an existing home. A hard money loan is typically a short-term loan secured by real estate. It comes with certain features that are distinct from the other regular loans. Here are top three significant advantages of obtaining a hard money loan:

1.Fast Approvals and Funding: The speed of the approval process and funding of the loan is often seen as one of the biggest advantages of hard money loans. In many cases, a loan can be approved on the same day as the initial request. A hard money lender can get your project funded in 10 days or less.

2.Easy To Qualify: A hard money loan is much easier to qualify rather than a tradition loan. It’s the best choice for those who can’t receive traditional loans. If you have been rejected by the banks for a conventional loan based on your credit score or other issues, you are still able to work with a hard money lender to get the money you need.

3.No Prepayment Penalties: It’s one more advantage of getting hard money loans that contribute to your success. Traditional banks often charge hefty prepayment penalties if circumstances change and a loan is fully or partially repaid before the due date, but there are no prepayment penalties with hard money loans.

What Is Hard Money Construction Loans?

Hard money construction loans are collateral-based loans and also its the best alternative to a bank loan or traditional mortgage when financing the construction of a building, or making improvements to an existing building. The collateral for a hard money construction loan is the value of the project after completion. Most of the real estate investors or borrowers find hard money construction loans more convenient because the restrictions are much easier in comparison to traditional loans.

Qualifying For A Hard Money Construction Loan

To qualify for a hard money construction loan, a qualified builder must be involved in your construction project. The private money lenders require detailed specifications of your construction plan. This includes all the details including floor plans and the materials that are going to be used in the home. Your home value must be estimated by an Appraiser in order to get a hard money construction loan. Typically, you need to put down 20-25% minimum for a hard money construction loan. This ensures that you are invested in the project and would not just walk away if things go wrong. This also protects the lender in case the house does not turn out to be worth as much as they expected.

Once you have qualified for and been approved for a hard money construction loan, the lender begins paying out the money they agreed to loan to you. However, they are not just going to give the builder the cash all at once. Instead, a schedule of draws is set up.

The Bottom Line:

A hard money loan is the best source of financing when banks are not an option or the loan is needed in a short period of time. If you’re having a tough time securing the traditional loan, you can go for a hard money loan to finance your home construction project quickly.

To find out whether you qualify for this type of funding or not, Contact Magna Capital Group, Inc. Today! We specialize in innovative real estate financing for borrowers who fall outside the box of traditional lending guidelines. Magna Capital Group offers private hard money loans for any type of residential and commercial project. We understand the complexity and details of construction projects and find proper financing to make your project successful. We are fast, creative and reliable consultants with the experience and lending sources to keep your project momentum moving forward.

For more details about our hard money construction loans program, Call Us at (310) 734 4044 or Email at info@magnaloans.com.

Build Your Dream Home With A Hard Money Construction Loan!

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Category : Construction Loans , Hard Money Loans , Residential Loans

Building your dream home is a very appealing and exciting event. If you are planning to build your new dream home but are not sure how to finance it, a hard money construction loan can provide you funds to construct your new home. Hard money construction loans are specially designed to fund new home construction or for remodeling an existing home. The home construction loans are also called a story loans that means the lender has to know the construction plan before they give you any money at all.

A construction loan comes with certain features that are distinct from the other regular loans. One of many advantages of the construction loan is that the borrower pays only interest till the construction is fully completed. Principal amount can be repaid when the home is finally constructed. Moreover, you can even turn the loan into a mortgage loan later in case you are unable to pay off the loan.

There are some differences between a construction loan and a typical mortgage loan. So if you are considering for a construction loan, here are few things you should know before you get the loan:

It’s A Short-Term Loan: A construction loan is short-term loan program. Generally, the loan term is 6 months to a year, and the money is used to finance the building of the house.

It’s Due All At Once: With normal mortgages, you pay off the loan in the form of monthly payments. But with construction loans, the entire balance is typically due at the end of the loan term once the house is built. That means you need to either have a cash reserve that you can use to pay off the loan when it’s time, or you have to get some other type of financing or loan to cover the balance.

It’s Not Give The Money In Lump Sum: You won’t receive the funds in one lump sum. Typically, the lenders give you a certain amount of money periodically based on the percentage of work that’s been completed on the house.

Conclusion:

If you want to build or remodel a home, a construction loan is almost a necessity unless you have significant savings. You are advised to get the pre-approved letter with the help of an expert finance broker before commencing your building project.

Magna Capital Group, Inc. provides hassle-free hard money construction loans that allow you to receive the funding you need to build the home of your dreams. For more specifics about construction loans, Call Us on (310) 734 4044 or send Email at info@magnaloans.com.

Hard Money Loans – The Quicker Way Of Financing Real Estate Deals!

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Category : Construction Loans , Fix & Flip Loans , Hard Money Loans , Real Estate Loans

Real estate investors choose to use hard money for many different reasons, but the main reason is the ability of the hard money lender to fund the loan quickly. In many cases, hard money loans can be funded within a week. The application process for a hard money loan generally takes a day or two and in some cases, a loan can be approved the same day. Quick funding is a significant advantage for real estate investors, specially when they are trying to acquire a property with many competing bids, a quick close with a hard money loan will get a seller’s attention and set their offer apart from the rest of the buyers offering slow conventional financing. On the other hand banks require lots of documents for conventional loans including credit score, income history and also there should be no issues such as a short sale or foreclosure with borrowers.

Here are some situations in which you can utilize hard money loans:

A borrower can get a hard money loan on almost any type of property – including single-family residential, multi-family residential, commercial, land, and industrial. Hard money lenders are primarily concerned with the property’s value rather than the borrower’s credit. Borrowers who cannot get conventional financing due to a recent foreclosure or short sale can still obtain a hard money loan if they have sufficient equity in the property that is being used as collateral.

Conclusion
You can consider a hard money loan to fund one of your future real estate deals as it works quickly and required less documentations rather than banks.

Manga Capital Group, Inc is a leading hard money lender in Los Angeles, California with 30+ years of experience lending on properties. For more information on our loan programs Call (310) 734-4044 or Email info@magnaloans.com

 

 

 

Why Use Hard Money Loan?

Category : Hard Money Loans

A hard money loan (also known as bridge loan or asset-based loan) is a short-term loan secured by real estate. The lender underwrites primarily to the collateral value of the hard asset as opposed to a borrower’s credit profile. These type of loans inherently carry more risk from a lender perspective, and with that risk comes a higher interest rate than traditional bank loans. Hard money lending is more prevalent today as traditional lenders have pulled back, credit has tightened, and traditional financing has become more difficult to obtain.

Why should you consider using this type of financing?

Hard money loans are very useful for those real estate investors who need a short-term loan to purchase property that needs repairs or needs re positioned in order for the property to qualify for a refinance into a conventional loan. In general, this is one of the best financing methods for the borrowers who can’t go the conventional route due to the following reasons:

• Bad credit
• Can’t show w-2 income
• Recent foreclosure or short-sale
• Property in need of repairs
• Deal requires a short escrow period

One of the biggest advantages of hard money loan is available and easy to obtain for you. Borrowing from friends and family is great, but they can run out and you never want to miss a deal because you can’t find funding. This type of loan is typically used for short-term funding – usually 6 to 12 months. Interest rate of a hard money loan is slightly high than a traditional loan but profitable for real estate investors. For example, if you pay 12% to borrow for a year but pay it back in only 6 months, you’ve only spent 6% to borrow those funds. So it’s not much if you’re doing right things and making the end profit that you should.

Hard Money Is Fast And Easy To Obtain

On the positive side, hard money loans are faster to approve than traditional bank loans. Many hard money lenders can qualify you and get you funded within few days. When you stumble upon a great deal and time is of the essence, hard money loans are the right choice for you because traditional lenders just can’t move that quickly. You have to provide your tax returns, two months of pay stubs, bank statements, and many other documents to obtain a conventional loan, and it still can be harder if you have a less than perfect credit rating. On the other hand, perfect credit is not necessary to get a hard money loan, but you just need to have a good exit strategy and also you should have the ability to bring some of your own money to finance your project. Hard money loans allow you to borrow up to 70% of the property’s value.

Conclusion

Your friends or family members can run out of funds anytime, but hard money loans are always available so you don’t miss an opportunity to create profit. Nowadays, hard money loans have become most popular financing option for real estate investors and individuals to make real estate purchases.

The advantages of easy access, convenient requirements, and rapid processing allow you to make your dreams of real estate into a reality. If you have any additional questions regarding hard money loans, call Magna Capital Group, Inc at (310) 734-4044 or visit www.magnaloans.com.

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    8730 Wilshire Blvd., Suite 410
    Beverly Hills, CA 90211

    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.

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