Hard money lenders are people who make loans using private capital to purchase real estate. These individuals have one or more investors and borrowers. The entity issuing the loan must charge the borrower enough to cover its costs and give its investors a return. The lender must retain enough to cover its overhead and desired profit margin. While the process is more complex, hard money lending is a viable option for many investors. This article will provide you with the basics of this unique type of lending.
One of the main benefits of hard money lending is that you can make interest-only payments until your loan is paid off in full. These loans are more flexible than traditional bank loans and are best suited for those who want a short-term loan with a guaranteed exit strategy. While the interest rate is higher than a repayment loan, an interest-only loan will help you with your cash flow. Your monthly payments will be lower.Continue reading “What is hard money lending?”