Once you’ve decided to make the leap into real estate investing, one of the most challenging aspects can be what type of investing to get involved with. You may choose to own various properties and take the landlord route, or purchase properties to renovate and sell. You could also choose to simply invest your funds with hard money lenders, sit back, and wait for your return checks to roll in. And all of these options are great, but they aren’t all for everyone.
If you’re choosing to invest your funds passively, you may also be wondering whether or not that’s something that’s even feasible in your locale. There are many hard money lenders across the country, including in Southern Virginia, and so it won’t necessarily be difficult to find a company to invest with. However, finding a company that’s reputable and consistently shows strong returns on their investors’ funds can be a challenge. Luckily, after over 20 successful years in business, Walnut Street Finance is growing and expanding into the Southern Virginia territory.
Before we get into why you should consider investing with Walnut Street Finance, let’s discuss what exactly a hard money lender is and what makes it a good investment opportunity.
What Is A Hard Money Lender?
Hard money lending is essentially when an individual or company lends funds directly to borrowers in place of a bank. Why would someone choose to take out a hard money loan, rather than working with a traditional mortgage company? There are a few reasons - for some borrowers or developers the lending process with banks and credit unions is simply too long. They may need to move quickly to secure a deal and waiting a month or more for the paperwork to clear the bank isn’t an option. In other cases the property itself may not meet the bank’s lending standards. When a fix-and-flipper or developer purchases a property with the intention of fixing it up to sell they may request a loan amount that’s higher than the actual value of the property and banks really don’t enjoy lending in those situations as it can be quite risky if the borrower doesn’t end up selling the property and recouping their costs. This is where hard money lenders come in.
Why Is Investing With A Hard Money Lender A Good Decision?
If you’re interested in using real estate investing as a means of building up your financial portfolio, you may be wondering why you should invest with hard money lenders rather than purchasing your own property. Of course, if you want to take the property ownership route, that’s great! But for some investors, the end goal is to simply build up their net worth, not their physical holdings - and that’s where passive real estate investing comes in. When you work with a reputable company the funds that you invest are then redistributed to borrowers seeking funding for projects. In the most simple terms, upon the completion of these projects - whether they’re sold at a profit or they’re buildings that have continuous occupancy - the investors receive a return check.
At Walnut Street Finance it’s a bit more complex than that - funds are distributed across a multitude of projects at any given time ensuring that an investor’s funds aren’t all tied up in one project that could make or break them. This also means that return checks are delivered at regular intervals, as opposed to only upon the completion of a project. This is just one of the many ways that Walnut Street Finance works to ensure that our investors’ funds are secure. We take doing our due diligence seriously, and with over 20 years in the industry we’re experts at determining whether a proposed project from a prospective borrower will be profitable or not.
As Walnut Street Finance expands into Southern Virginia, there will be even more opportunities for individuals to build their personal wealth by investing with us in a market that they’re familiar and comfortable with.
For more information on how to get started investing with Walnut Street Finance, check out our guide Smarter Ways to Invest in Real Estate below and then get in touch!