A real estate lender is an entity that provides capital for borrowers looking to invest in a residential or commercial real estate property. The term ‘real estate lender’ is almost synonymous with institutions such as banks (and savings and loans), but like many real estate investors know, banks are rather inflexible entities that all follow the same lending guidelines – when it comes to any unconventional investment situation, approaching a bank is almost out of the question.

But there is a solution. When conventional financing is insufficient or unavailable to you, you still have the option of contacting a private real estate lender. Private lenders offer a type of loan that is becoming increasingly significant again for both residential and commercial properties – the hard money loan.

Hard money loans are what conventional real estate mortgage and commercial loans are not – fast, flexible, and convenient. When investors find themselves in a situation where it is imperative that they come up with cash quickly – for whatever reason – connecting with a real estate lender that can offer hard money is invaluable.

However, understanding what a hard money loan is, and choosing the right real estate lender for your needs can be crucial to the success of your real estate venture.

The Hard Money Approach

Suppose you have in front of you an offer you can’t refuse. Perhaps it is the perfect new property you’ve been waiting for. It can also be the perfect fixer-upper. Or maybe the perfect pre-construction or even a property you already own that just needs rehabilitation. Whatever it is, you’re faced with a decision – act now, or lose your place in line.

You know you can secure the funds from your regular real estate lender, but unfortunately, the standard vetting process will take too long for the seller. If you don’t have the cash on hand, then the next best thing is a hard money loan. Your private real estate lender is ready to quickly provide a short-term loan that can help you make hard and fast decisions now in order to make your dream investments a reality.

A hard money loan can be available to you in just days (most often less than a week), a fraction of the time it takes a bank to consider your loan request. Best yet, since the loan is in large part based on the value of the property, you are not bound by the same application process upheld by banks. This usually means you don’t have to provide the same level of paperwork banks require (from credit reports to tax forms) – here, all you need is a loan application provided by the real estate lender and the necessary property information.

What to expect from your lender

You should always expect your real estate lender to provide you with accurate information and clear, honest answers to all of your questions. When it comes to your hard money loan, you should be aware that the loans periods are shorter that that of conventional loans (around 1 to 3 years as opposed to 30 years), and that the interest rates for these hard money loans are much higher, typically around 20%. A private real estate lender will also offer a lien position, often first, but sometimes second or third depending on the property and size of the loan.

Your real estate lender should also be able to provide more flexible loan terms tailored to our needs and goals. As long as you are investing in real estate, there is almost no situation that is not applicable for a hard money loan. Whether all you need is a few hundred thousand dollars or a couple of million, you can feel assured that you are only steps away from securing your dream property.

In search of a real estate lender? Talk to your broker, or find out more about more what hard money loans from a reputable real estate lender can do for you by contacting 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.