When someone is looking for a hard money loan, one of the most common questions is, “Will my target real estate purchase qualify or attract the interest of a hard money lender?” This is an important and valid question that deserves a detailed answer.
To be clear, a hard money loan can be secured for virtually any real estate transaction. For example, a loan could be secured for the purchase of a single-family home, multi-family residential property, commercial real estate, etc. However, it is worth noting that the vast majority of hard money loans in Los Angeles and elsewhere are issued as mortgages for the purchase of residential property.
fix and flip
One of the most popular real estate transactions financed through hard money loans are fix-up and change-out projects. Loans are typically used to purchase residential property for the specific purpose of upgrading the home and then putting it back on the market for a profit.
Unique properties will present challenges
It can be difficult to find a reputable hard money lender that is willing and able to make a loan for other types of property, such as:
• Land purchases;
• Industrial property (for example, steelworks);
A good rule of thumb is that the more unique the property, the more difficult it will be to find a reputable and respected lender who is willing to provide a loan for the purchase. Why? Because most lenders are generally interested in providing support on properties that will sell more easily. This helps ensure that the lender recovers its funds as quickly as possible, even if the borrower suddenly decides to withdraw from the project or is unable to meet loan payments.
Hard Money Loans for Real Estate Sales
Although it is more difficult to find a reputable lender for more exclusive real estate transactions, it is worth noting that if you have identified a property on the market that is being sold through an estate sale, you may be able to obtain a loan in Los Angeles and in other places. with fewer obstacles compared to, say, buying a restaurant. This is because some hard money lenders can also make loans while an estate is going through the probate process. This is an important service as, in many cases, surviving heirs may need to borrow funds to pay off outstanding debts and obligations that have become attached to the estate of a deceased loved one. Hard money lenders can provide a loan secured by real estate that is going through probate. It is important to highlight the fact that traditional lenders, such as credit unions or banks, do not normally offer this type of assistance.
Looking to apply for a hard money loan in Los Angeles or any major city in Southern California? You have options and you need to take action as soon as possible.