Have you ever wondered what it is like to live in a world that doesn’t need money? You’re probably thinking how good it would feel to skip work, stay in your house, and watch TV all day because all the things that you need are just right in front of you. However, the world you are in now doesn’t work that way and you certainly need money to get things done.
Real estate investors are much luckier because they can use several ways to secure funds for their real estate projects. They can qualify for bank loans or ask hard money lenders for help when they invest property. And if they know someone who has access to quick cash, they can use private money to finance their investments.
First stop, bank loans. Qualifying for a bank loan is one of the common methods of obtaining financing for a real estate project. To get the approval of banks, mortgage companies, and other traditional lenders, a real estate investor should be able to prove that he has outstanding credit rating. He also need to present documents detailing his current financial status and his ability to repay the loan he is making.
If the investor has low credit score and can’t spare enough time to prepare the necessary papers to qualify for a bank loan, he is expected to go to hard money lenders. Hard money lenders are said to be the BFF of those who invest property because they provide the type of financing mostly suited for one’s real estate investments.
Hard money is collateral-based. If the property being offered as collateral has a high after repair value, then a real estate investor is likely to get his loan application approved. A downside with hard money, however, is that it has high interest rates and shorter repayment terms.
Aside from hard money lenders, private money lenders provide alternative financing for those who don’t qualify for bank loans. Like in hard money lending, anyone can obtain private money, even those who lack creditworthiness. The difference with private and hard money, however, is that the former offer flexibility that the latter won’t be able to give to the borrower. A borrower can ask a private money lender to create terms that would benefit him or her.
Having sufficient funds makes it easier to invest property. However, a real estate investor must remember to choose the right method of financing to avoid potential problems.
When it comes to your finances, if you don’t know where you’re going, any road will get your there. We at Global Diversified Partners partner with your to re-claim your decision making, and ultimately your future.
Our goal is to be the investment firm of choice for individuals seeking to diversify their portfolios into tangible assets, not just paper ones. We help people take control of their financial well being by educating them on the benefits of investing in tangible assets and by altering their perception of what “smart investing” means. Daniel Kalenov Global Diversified Partners has a global focus and we’re opportunistic, but prudent.
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