Hard Money vs Private Estate Funds

What is the difference between
“Hard Money” & “Private Estate Money” 

Hard money has a much higher interest rate and many more origination points than Private Estate Money.  These loans are for people who are self employed,  or for those who do not show their actual income on the yearly tax returns. These loans are for people who just do not fit into the Government loan guidlelines. These are great loans for investment properties! Hard Money vs Private Estate Funds
Example #1:  People who need money to finish a construction project but just do not fit the Bank’s guidelines.  This gives the person a way to finish the project, then they can obtain a FNMA or FHLMC Government loan.

Example #2: Inheritance where the property has a lot of equity, but you just do not qualify under the normal guidelines.

Example #3: The most important thing you can do with Private Money is take the Title:  in a Corporation, LLC, or even a Family Trust!

What is a Hard Money Loan?

A Hard Money Loan is a form of financing available to purchase and repair an investment property. These loans do not conform to conventional underwriting standards and are not usually offered by banks and mortgage brokers. One unique attribute of hard money is that financing is made available more quickly. We routinely close loans in 7-10 business days. Another attribute of hard money is that financing is made available to people with less than stellar credit because there is more equity required to lend.


Why would a borrower use a Hard Money Loan?

Most Real Estate Investors prefer hard money financing for many reasons. One is due to quick closings. Many times in order to have an accepted offer on a undervalued property, quick closings are required. Another reason is that real estate investors typical make a higher return on investment when the repairs for the home can be financed as opposed to using their cash.
Need more questions answered on Hard Money Loans?