If you need money fast for whatever reason, consider hard money lenders. St Louis hard money lenders are available for loans of varying amounts depending on financing needs. Hard money loans are available from numerous lenders across the country so it’s essential to research and compare terms and rates. The most important thing though is to make sure you know how much money to borrow.
For property loans, St Louis hard money lenders like most, require borrowers to put up their own money during the loan process. Lenders want borrowers to have some skin in the game as they say, so they will provide financing in the 70% range, which means you’ll have to finance the rest. These percentages are significant because the point is to make money. The adage buys low and sells high applies. Do your homework before submitting a loan application so you know how much you’re going to make. The lender will want as much detail as possible. Provide full rehab costs, sales contracts, property appraisal, repair estimates, bank statements and tax returns for a more favorable reply.
St Louis hard money lenders can provide funding in as little as two days after receiving all of your documentation. This quick turnaround can give you an advantage over other borrowers who are applying to conventional lenders such as banks or credit unions who may take weeks or more to process their application. Of course, the convenience of dealing with hard money lenders comes at a cost. Interest rates in the high teens are not uncommon. But don’t let high-interest rates deter you. If you find a property in a high sales volume area and the price is right, you could rehab and sell the property in a matter of days after listing. Sellers like hard money as well since it means you’ll have the cash faster than other buyers.
If you’re sure you want to borrow from a hard money lender and skip the bank how do you find a reputable one. You can go to local real estate meetings and ask attendees. You could also ask your realtor if they have any suggestions or you could go online. Now the ability to borrow a lot of money fast is attractive, but don’t forget to do your due diligence. Research the lender to make sure they’re legitimate. Try to meet in person to avoid any future misunderstandings. Find a lawyer to review the lender sales contract. Since you are not dealing with a government-regulated lender, there are fewer rules which can be good or bad.
There aren’t any hard and fast rules on when to use a hard money lender so it’s important to know what to do. The sky’s the limit when it comes to loan purposes which means hard money lenders could finance just about anything you have as long as the numbers line up.
There are downsides to hard money lending. It is a business, and as mentioned, the interest rates are high. The repayment terms are short, usually a year or so. Hard money lenders only lend for business properties, which means no owner-occupied homes. You might want to consider incorporating yourself as a limited liability corporation or LLC to give you that professional look, at least on paper.
There are other options of course. You could try to get a line of credit such as a home equity loan as long as it’s enough for your needs. You could also borrow against your 401(k) if you have one. If you like the place you buy and you want to move in, you could always try to refinance it through a conventional lender and get a regular mortgage.