What is ‘Hard Money’? A hard money loan is a private loan generally given out by non-banking institutions. Hard money is the best solution for volatile economic times when your investment just does not fit the confines of a conventional loan structure. A loan from a lending institution such as a bank can be a complicated process, take too long to be approved, or have too many restrictions. On the other hand, fast but high interest rate cash advances - from your credit card, for example - is not the best idea to cover your costs either. Hard money comes from an accredited private lender who can get you the cash you need quickly and get you started on your investment today.

Historically, hard money was something banks used to do without hesitation, but over the years, an increasingly complicated market has dulled the confidence of banks to lend money outright. Foreclosures have increased and banks have most often taken on losses from their loans. Banks have had to reconsider their stance on making hard money loans without a strict vetting process. This in turn has increased restrictions, paperwork, and the ‘red tape’ we most typically associate with bank loans today.

The need for private lenders has increased dramatically over the years, and these days a hard money loan from a direct real estate lender is an excellent option. Hard money comes with very few restrictions, and can help with any situation you may be in, whether it is for purchasing a new home, distressed property or development, for refinancing, and even for situations of foreclosure or bankruptcy. Most importantly, hard money loans are funded very fast.

It’s all in the timing.

When can hard money work best for you? Hard money is perfect for that spontaneous or last minute situation you may find yourself in. Whether it is a positive or negative one, a hard money loan can make a big difference to your success.

Take, for example, a situation where you come across an undervalued property whose owner is desperately trying to sell in order to avoid foreclosure. You think this is a good investment, but the hitch is that the seller needs to be able to offload the building in a matter of days. Clearly, you will not be able to get a traditional bank loan in days – probably not even for weeks – but a private lender can get you hard money as fast as three to seven business days.

As quickly as hard money can get you started, it can also help you bridge the gap you face through hard times. A good example is when you are in possession of a building with excellent potential for resale, but for whatever reason you are finding yourself facing foreclosure or bankruptcy due to lack of consumer confidence. If losing your property and investment is out of the question, and if you see that light at the end of the tunnel, a hard money loan can quickly give you the support you need. Most banks won’t even consider a loan in face of foreclosure or bankruptcy.

Confidence is key

Many people will recommend to the borrower that they really need to be confident that they will get a return on their investment. Thus, confidence in the real estate property in your possession to turn you a profit is a key element to your success. Getting hard money from a private lender is much easier than going to a bank, but like any loan, facing the fact the borrower is responsible for paying it back should always be in the forefront of the your mind. Careful planning and realistic expectations are very important, and the proper research will allow you to make smart decisions.

To find out more about hard money and how it can help 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.