Real estate investors don’t need good credit, good income or pretty tax returns to get a hard money loan. These loans are based strictly on the value of the property – not the borrower. Real estate investors who are best served by hard money loans generally fall into 3 categories.
(1) real estate investors purchasing property, (2) investors who have a lot of equity in an investment property and need temporary capital, and (3) investors who need to prevent foreclosure on an investment property.
Hard money loans are short-term loans, generally about a year, available exclusively to real estate investors. Hard money lenders are almost always more expensive than conventional banks, but hard money is also easier and faster to acquire.
Since we base our loan on the property, not the borrower, our loan application process is a tiny fraction of what’s involved in applying for a typical mortgage loan. We can also typically close a hard money loan in about 5 – yes FIVE – business days. Banks generally take about 45 days from application to closing.
(1) Real Estate Investor Buyers – Hard Money for Flips, New Construction or Rentals – Bridge Financing
You can use hard money loans to buy and improve investment property. It doesn’t matter whether you intend to remodel, build, sell, or rent the property. Flippers, developers, builders and landlords can all use hard money loans to leverage their investments. Hard money lenders can even base your loan amount on the after-repaired (ARV) or as-built value (ABV).
You do need an exit strategy because hard money loans are short-term. Hard money loans are typically for 1 year. Extensions may be possible, but not guaranteed so you need an exit strategy. Generally that means selling or refinancing with a longer term loan before the term is up. Lots more info about using hard money for construction financing here. Case studies with various investor exit strategies here.
(2) Hard Money Loans – Cash-Out Refinance – Cash out Refi
We can offer cash-out refi options. If you own investment real estate with significant equity and you need capital for business or personal reasons, hard money could help. Hard money lenders can do cash-out refinance on investment property extremely quickly. You can finance up to 65% of the value of the property with us. We can typically close cash-out refi transactions in about 5 business days.
You’re not required to use the funds on the property you’re borrowing against. The only hard part about qualifying is that you must have at least 35% equity in the property. So if it’s worth $400,000, you would only be able to borrow $260,000. Case studies with detailed examples over here.
(3) Foreclosure Prevention with a Hard Money Loan – Refinance to Prevent Foreclosure
If you are facing foreclosure on an investment property that has significant equity, a hard money loan could be a solution. We can refinance your property – even if it’s already in the foreclosure process – as long as you have at least 35% equity. Hard money lenders don’t generally care about your credit or income (seriously!) if you need to finance 65% or less of the current value.
Little City Investments offers hard money loans to real estate investors in Austin and Houston Texas. We don’t evaluate your income or credit – our loans are based exclusively on the value of the property. We can lend up to 75% of the value of the real estate (for non-refinance loans).
Let us know if Little City can help finance your real estate investment projects! We do loans for rehabs, new construction, rentals and flips in Austin and Houston. Quick online loan requests here.