The Beauty of Hard Money

An article submitted by Shaun A. Siddiqui. (See below) The article is solely the opinion of the writer.

The strange thing about hard money is people either embrace it or avoid it like the plague. There really is no middle ground. No black or white. So where lies the discrepancy? Understanding.

The facts are pretty straight forward. A private investor loans money to an individual where time is the primary motivating factor. This generally means hard money lenders target their services to investors, a niche market where the desire for flips, rehabs and “lending at the touch of a button” are real necessities. These lenders tend to interchange the strict underwriting requirements and slow process of banks with higher rates and a much faster closing. This is the side of hard money that real estate investors love.

Then we have the other group of real estate investors wearing hazmat gear and shielding their children. They fear the 10% and greater interest rates, the upfront points and the fear that maybe the lender might come after them. Of course the rates and the points are legitimate fears, the last one isn’t so likely unless you get your loan from Tony Soprano. As it turns out the main reason these people are so against hard money is because they are seeking it as  a last resort and fail to contemplate its real purpose.

So when exactly should a borrower seek a hard money lender? … When time is the underlying factor. A simple rule is “long term: bank loan, short term: hard money” And a good point to keep in mind is if your bank isn’t lending you money, chances are very good, that a hard money lender isn’t going to either.

Written By Shaun A. Siddiqui Soarius@Hotmail.com

Greenbanc Lending Services LLC
www. TheInvestorLender.com  (coming soon)
-Residential
-Hard money
-Commercial (up to 500M)