An excellent real estate investor is always active. They don’t wait until the industry experts say it is safe to invest. They act fast on each deal they come across and stay in a cycle of flipping, fixing, closing, and reinvesting. Their business model requires a steady source of funds, of course. The old way to get funds for buying and renovating a house is the mortgage loan. It is a bank loan, and while it has an extended payment term, it is not easy to qualify for. You can wait between a month and six months to get money in your bank account. It is too much time to waste when you want to fix and flip as quickly and as safely as you could. So your next loan option is Savannah, GA Rental Loans Lender. A hard money loan provides a quicker way to get money for real estate investment.
How does a hard money loan work?
It is a short-term loan designed only for real estate investors who need money fast. Unlike a bank loan with a more extended approval period, the longest you can wait after applying for a hard money loan is ten business days. In an ideal situation, it takes three to five days to receive money. During application, you will go through a two-stage process. It entails:
• Stage 1: Pre-approval stage
In this step, the hard money lender wants to know your background. So they will ask for things that can offer information about you. These may include your national I.D or passport, postal address, latest bank statements, and related documents. If you meet your Savannah, GA Rental Loans Lender, online, they will have you fill an internet form and submit it. Once you activate your account, they will ask for copies of some of the documents above. To prepare for this stage, keep records that can say more about you close by.
• Stage 2: Property approval
Knowing you is the first thing the lender needs to do. Once they do, they will look to know your property more. The lender is interested in the value of the property. So a valuation exercise is necessary to know your property’s current value and its estimated value after the renovations are over. They want to understand the risk they would take by offering you a loan to repair your house. If your hard money lender does not have an in-house home appraiser, you might have to get one yourself. It is one of the costs you will encounter. It is therefore advisable to expect this cost. The average appraisal fee ranges from $400 to $600. Once they find out the estimated house price after the repairs, the lender will decide whether to give you a loan or not.
What should you not worry about?
If you are reading about hard money loans for the first time, and want to try them, don’t worry about some things. The hard money lending companies don’t bother about these things either. So they should not stop you from accessing this type of personal loan from private lenders. These include:
• Your bankruptcy status
• Your low credit score
• A few foreclosures you have suffered recently
• A few short sales you have had recently
• You are in the self-employment sector. Banks who give mortgages deal with people in stable employment. Hard money lenders don’t mind you being self-employed as long as you can prove that you can afford to repay your loan.
How to apply for a hard money loan and get quick approval
It would help if you did not lack savings or considerable home equity when applying for a hard money loan. You see, the business these lenders are in is too risky that banks don’t even consider doing it. To ensure that they will not lose money, they ask for a relatively larger deposit or substantial home equity. If you have either of these or both, then your application will be cleared fast. Their loan term is short; it can even be six months. So you should have money kept aside to save you when you cannot raise your monthly loan payment. The emergency savings can also help you finish your repair projects if the budget ends up bigger than estimated.
It is easy to fund your real estate projects in Savannah, GA if you know what to do. The right thing to do is to take a hard money loan from a trusted company. In this case, your best choice would be BridgeWell Capital, America’s top lender for investors who want to get low-interest rates and a variety of loan choices.