Walnut Street Finance Blog

What is a Hard Money Loan? Back to Basics.

Posted by Walnut Street Finance Team on Feb 6, 2020 9:45:00 AM

What is a Hard Money Loan?

Simply, hard money loans allow you to borrow money using a real estate private lender instead of a bank. The definition of a hard money loan is that the real estate property serves as the “hard” asset to back the loan.

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That's where the name comes from, by the way. There is a "hard" asset to back to loan, not from the loan being hard to get, or that the lender is tough!

Many real estate entrepreneurial investors who need to borrow money for their projects and are unable to get funded from their bank turn to a hard money lender to get their projects done. It is common for builders, developers, and fix and flippers to hard money for the differences—and the advantages—it brings.

Here are some advantages of hard money loans: 

 

Fast

Because of the shorter and simpler process, a hard money lender like Walnut Street Finance can get you a fast same day pre-approval and then close in as little as 3 days.
 
A bank or traditional lender takes weeks or months to process your request and get you the funding you need—if they approve it at all. Even waiting to find out if you have been approved can use up precious time and cause you to miss your opportunity.
 

Easy

Unlike banks and traditional lenders, there is not a lot of paperwork or hassle. It is a simplified, streamlined process. This is particularly true with Walnut Street Finance because before we were lenders, we were builders & developers. So we know what a hassle it can be to get a loan and jump through hoops. Our goal as a lender to make it as easy as possible so financing doesn't hold up your projects.

Short Term

It is not a long term loan. Think of it as a bridge loan—it gets you from the place you are now to a point where you can complete the project, so you can move on to the next one. Typically, a hard money loan from us will have a 6 month to 24 month term, depending on the type of project.

Availability

This is perhaps the most important thing to know when you are researching ‘what is hard money lending?’ Private lenders are always available to fund smart, well-thought out and professionally prepared projects. When banks aren’t lending, we are.

So what are hard money loans used for?

  • Fix and Flip Projects
  • Acquisition of an Investment Property
  • Construction or Rehab Projects for Investors
  • Rehab to Rent Projects
  • Refinance Investment Properties
  • Bridge Loans on Investment Real Estate Projects

In case you didn't realize it, Walnut Street Finance does NOT lend to individual home owners on properties that are their primary residence. Hard money lending is not a traditional mortgage loan.

Learn more about Walnut Street Finance's hard money loan options to see how fast and easy it is to get your next project funded. If you need funding, let us help!

GET PRE-APPROVED NOW

 

Topics: Hard Money Lenders & Loans

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