Serious real estate investors know how a direct real estate lender can make their next deal a success. When a potential investment calls for a quick turnaround, extra financing, or creative planning, a typical lender such as a bank is not the optimal choice. A direct real estate lender can have approve and extend a loan in a matter of days, allowing an investor to move quickly and act on their decisions with an assured hand.

A direct real estate lender is a private entity that provides a short-term private loan based primarily on the value of the property. Usually a small company – or even just an individual – a direct real estate lender will forego the usual checks and balances that banks rely on, and use the property as primary collateral for the loan. These loans are often called ‘hard money loans’, and you may also hear direct real estate lenders referred to as ‘hard money lenders’.

Why hard money?

Hard money is the simplest way to make your investment happen. Most direct real estate lenders will loan you up to 65% of the value of the property, and as there is very little paperwork to fill out, the turn around time for your loan will be brief. A short loan application is virtually enough to secure a loan – once approved, the direct real estate lender can have the capital ready for you in mere days. When it takes days to just fill out loan forms for a bank, and then weeks to wait for an approval, you can see why investors turn to a direct real estate lender as a practical solution.

What can a direct real estate lender offer?

A direct real estate lender can offer flexible terms for your loan that banks could not even consider. Whether your investment property is an existing structure, new construction, distressed property, or even facing foreclosure or bankruptcy, a direct real estate lender is prepared to provide you with the loan you need. As long the real estate property has incredible potential, you don’t have to worry about the state it is in now. A direct real estate lender will work with you to figure out the best possible loan structure for your needs and goals.

Ultimately, what a direct real estate lender provides is freedom from the rigid guidelines banks follow in order to approve a loan. While many people point out that a hard money loan is great for a borrower with little credit or bad credit, it’s not just an opportunity for new investors trying to turn their financial situation around. Seasoned investors are particularly at an advantage because they can put their knowledge of real estate to use, making the most out of the a fast hard money loan while keeping in mind other features of the loan that must be taken into consideration.

Things to know

There is a reason why hard money loans from a direct real estate lender are often called ‘bridge loans’ – a short-term loan designed to get you to the next stage of funding. Hard money loans are designed to make your investment move fast and also to be paid back quickly. Loan periods, depending on the lender, are generally a year or two (sometimes renewable), and interest rates hover around 15% to 20%(double a standard mortgage loan). With these high interest rates and shorter loan duration, it’s imperative for the borrower to pay back the loan as quickly as possible.

Your level of confidence in your real estate investment should be a good barometer for whether a hard money loan is right for you. If the potential for a hefty return on your investment is great, then the flexibility of a hard money loan from a direct real estate lender may be the answer you have been looking for.

To find out more about how a direct real estate lender and a hard money loan can benefit you, consult Lighthouse Capital Funding. We are a private lender that specializes in providing you with a convenient and effective solution to your hard money needs. Contact us today.