How much does hard money cost? Are these loans expensive?
Is hard money expensive? The quick answer is no, when used correctly.
Hard money loans are actually cheap when used in transactions that fit what they’re intended for.
Pros of Hard Money
Hard money loans are helpful in a few ways:
- Using hard money is cheaper than taking on a partner.
- Hard money lenders focus on real estate investors, unlike most banks.
- It’s easy to qualify for.
Getting a hard money loan is much quicker than the process for a bank loan. In the real estate investment community, closing quick will: 1) get you the deal first, and 2) often get it at a better price.
When investors add up the savings they can get by closing fast with hard money loans, it’s clear this form of financing is a bargain. Missing out on deals and discounts can be the end of your lucrative real estate investing business.
When NOT to Use Hard Money
That being said, hard money does not belong everywhere. Used wrong, it can cost you big time. Here are some things to keep in mind:
- It does NOT replace a bank loan.
- If you have 30 to 60+ days to close and have a bank that works well with investors, you should be using a bank over hard money.
- If you don’t expect to sell or refinance ASAP, a hard money loan probably isn’t right for you.
When hard money loans are used on the right deals for the right borrower, they put more money in your pocket. To increase your speed of investing and increase your cash flow hard money is one of the best tools.
At the end of the day, is it not your goal as a real estate investor to put more money in your pocket?
How Much Does Hard Money Cost?
How much do hard money rates cost? Typical hard money across the country runs from between 8% to 14%. Your actual rate will depend on your loan-to-value and your specific lender’s points and policies.
People see that these rates are higher than bank loans, and they assume it’s a scam. You have to remember that the flexibility, speed, and ease of hard money loans used right helps them pay for themselves.
How to Get a Hard Money Loan
Hard Money Mike has been assisting real estate investors for over 20 years. What form of financing are you looking for?
Contact us for hard money, traditional lending, and setting up bank lines of credit. Email us any questions at Info@HardMoneyMike.com.
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- Check out the videos on our Youtube channel.
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Get connected and accelerate your cash flow. Happy Investing.