3 Ways to Find Loans for Rental Properties

Rental Properties Loans

 

For real estate investors seeking ‘buy and hold’ investment opportunities, financing is always a conundrum. So how does an investor find loans for rental property? Because there are so many avenues and options, an investor in rentals must make 3 important considerations when seeking financing:

 

What Loan Would You Qualify for?

What type of financing can you qualify for? Is your income and credit up to par to qualify for a bank loan? Or do you need to seek out other alternatives for financing such private money, hard money loans. Take time to find out what you can qualify for before you go too far down any road. Try to discover every, possible option for financing and put every option on the table.

 

Is a Private Money Loan an Option?

Is a private money or hard money loan an option for you? If your credit is not up to par, or you have self-employment income, you may not qualify for bank financing. This may make you a candidate for hard money financing, since most hard money lenders typically don’t worry about credit or income, but more about the property itself that is being used as collateral for the loan.

 

Is This a Short-Term Loan Situation?

Are you seeking a short-term solution or permanent financing? If you are just looking for a short-term, bridge loan to purchase a rental property, this is very different from a long-term, permanent type of loan for a rental property. Research the various options once you know what your goal is for the financing.

Whether you’re seeking a bank loan, a hard money loan, or some other form of loans for your rental property, start with the 3 considerations above. At California Private Money Lenders we help you take a look at the three considerations above for financing and a whole lot more. It’s important to have a trusted private money lender with an excellent track record as your teammate when seeking loans and buying rental properties. Give us a call at 707-315-1119 or fill out our borrower inquiry or contact form and one of our private money lending team members will be in touch promptly to answer your questions.

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Why Would You Borrow From a Hard Money Lender?

Common Reasons for Hard Money Loans

Why would someone ever borrow a hard money lender? Why would you need a hard money or private money loan?

Most assume it’s due to having bad credit or when money is needed fast. So, what is a hard money loan? This is any non-bank loan from a private source, primarily used to purchase or refinance “hard” assets such as cars and real estate. These are very different from payday loans, which are more short-term, consumer loans. Real estate investors are using these loans to make money, and also to make their cash go further. There are many other reasons why someone would pay the higher interest rates associated with these loans.

 

Private Money Loans are Fast:

The biggest reason is the rapidness of the funding of a private money or hard money loan versus a bank loan.

 

Less Strict Underwriting:

Another reason is due to the strictness of bank underwriting standards after the recent real estate crisis. Even qualified borrowers are deemed unqualified and cannot obtain loans against hard assets such as cars and real estate.

 

Buying Out a Partner:

Another reason people borrow hard money loans, is to use them to buy out a partner or family member in a hard asset such as real estate. Often, the interest paid on a hard money loan is much less than the percentage someone else may be costing you in a piece of real estate. These are just some of the reasons why someone would borrow at higher interest rates.

You have to way the advantages and disadvantages of obtaining a hard money or private money loan. One of the best ways to do this is by speaking to a trained private money lender about your particular situations, discussing the pros and cons, and coming up with a feasible plan that makes sense both dollar wise and stress wise for you. Give us a call at California Private Money Lenders at 707-315-1119 and we would be happy to answer your questions or you may fill out our borrower application or contact form and one of our trained private money specialists will be in touch promptly.

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