Hard Money Funding
There is no doubt that the decline in the real estate market has changed the face of the lending environment as we know it. It has changed the economy and the future of the economy. Many lenders who used offer loans typically decline 99% of loan submissions offered. These are commercial lenders, public affiliates that are traded day in and day out. Private hard money funding for real estate investment is a practical option that should not be overlooked. Real estate investors are facing difficult times, but there is a way out.
Hard money funding involves asset-based loans primarily for residential property investments. There is a definable benefit to obtaining hard money loans from private lenders for real estate investments in terms of taxes. To put it simply, there is a tax-advantage if an investor can turn rehabilitated property around in a short period of time. This signifies a markup on the bottom line for an investor. The South Carolina area is fertile ground for real estate investment. In terms of landscape, this property is exceptional and will be noticed by buyers in the very near future.
A hard money loan is based on value after repairs, when it comes to taxes. The investor can actually put off tax liability for certain period of time in order to gain more financial ground. Hard money funding from private lenders provides this ground. Real estate investment in home areas is a primary appeal. By obtaining investment funds from a private lender, significant discounts are available. Investors know, when working out the numbers, that even a matter of 2% is a proliferative advantage for them. Generally, hard money funding from private lenders can offer a 65% LTV but can also be offered on ARV. ARV carries more tax advantage, but either way, the investors can gain more from a private agency better than they will from a public lender.
Closing costs, rehab costs, general real estate value, and AVR are being considered in terms of final transaction. From a private hard money funding perspective, this allows the lender to give more leeway to the investor. This is something that commercial lenders cannot offer. A broker price opinion is preferred among private lenders, but they will work with AVR. The overall cost that an investor has to put out when using a private lender versus a commercial lender is much less. More capital is left open for investment and returns are maximized. South Carolina offers an ideal territory for investors to seek private lending for investments.