Three Reasons You Will Need a Private Hard Money Lender

When you are involved in real estate investing, eventually you will find that it is essential to have access to a private hard money lender.

This is because when you purchase a property for the sole purpose of reselling and making some quick cash, buying the property with a conventional bank sometimes becomes too much of a hassle and hard money is like having your own cash at hand.

Banks require you to provide them with lots of information showing proof of your credit worthiness, your employment and how much assets you have.
To the contrary when using cash lenders, you get the following:

•    No Credit Check
•    No Income Verification
•    Less Paperwork
•    Quick Closings

Typically it only takes about two weeks to close a deal with cash whereas it takes a conventional loan 30 days and longer to close due to the process of verifying all the necessary documentation.

The main three reasons you would need a private hard money lender is:

1.    If you have no or bad credit

The majority of the world has gone through a period where they failed to pay bills on time or they just have too much credit which causes the score to go down. Fortunately for us, this does not become an issue for these types of loans. The lender will, however, adjust the interest rate on the high end if your scores are low.

2.    If you cannot verify your employment

Most investors are self employed and do not pay themselves with actual paychecks. Because of this, it is very hard to verify how much money you make monthly. The only way to prove income would be from a 1099 and that only proves how much you made in the previous year.

3.    If you are purchasing bank owned properties

Normally bank owned properties require that you pay them in cash since the property is being offered way below market value. They require you to show them proof of funds in order to even consider looking at your offer.

This is where your private hard money lender comes in to play. They provide the proof of funds and offer those funds at closing on your behalf.

There are no seasoning issues and no extra stipulations. The bank gives their price, you provide an offer, they either counter or accept your offer and you are on your way to a closing.

Using a private hard money lender is definitely necessary for quick cash and no hassles. You really shouldn’t mind the high interest in that your goal is to dump the property in quick time any way.