Private Funding for Residential Investment & Commercial Properties
Via Pedicone is dedicated to help you find the best funding solution that fits your unique needs and circumstances.
What Is Hard Money?
A “Hard Money” loan is a private funding alternative to a conventional loan, which may not fit the borrower’s lending needs. This generally happens when a borrower needs money to jump on a “hot” real estate deal and does not have time to wait for the stringent and sometimes lengthy underwriting process associated with a conventional loan. Hard money is offered by many different funding sources, from large private institutions to individuals seeking higher than average interest rate returns on their money. It can be offered for both residential and commercial real estate transactions, and the terms of these loans vary from deal to deal and lender to lender.
How Does Hard Money Work?
Generally the interest rate and the number of points will be significantly higher than with a conventional loan. Hard money lenders, although they do sometimes look at the borrower’s credit, oftentimes they make lending decisions based primarily on the equity of the property.
• Primarily asset-based, and not based on a borrower’s credit
• Speed and efficiency
The borrower obtains a short term, high interest rate loan in exchange for quick access to funds from a hard money lender.
A smart hard money borrower realizes that it is not the “cost” of the money that is important, but rather the “availability” and “timing” of the money. Essentially, there is plenty of profit to go around and, by quickly closing on the deal, the parties have created a beneficial transaction for themselves.
Here are some other typical uses for hard money:
• Land Acquisition & Development
• Building Acquisition & Rehab
• Investment Properties
• Emergency Cash-Out
• Quick Property “Take-downs”
• Low Loan-To-Value Loans
• Non-bankable Transactions
• Short-term “Flip” Properties
• Foreclosure or Bankruptcy Bailouts
• Self-employed or Cash-strapped Borrowers
• Any Short-Term Financing Related to Real Estate