A Guide to 3 of the Most Common Property Loans

OlufisayoSeptember 5, 20180827 views

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You’ve been keeping an eye on the real estate market, and you’re certain there is money to be made investing. You just need the resources to get started. Learn about limits of a bank mortgage and the hard money lender San Diego investors depend on to fund their businesses.

Conventional Bank Loans

Do you have a lot of cash to pay closing costs and high down payments? A traditional bank loan can save you thousands in interest and give you an affordable payment to minimize your expenses.

For long-term investments, landlords might use:

Interest Only Loans – Leverage capital while only paying the usury required to hold property.
Balloon Payments – Low initial payments but no need to refinance if the markets slow down.
Adjustable Rate Mortgages – Predicable changes allow you to strategies your finances.

These financial products offer stability and affordable rates, but many investors do not rely on banks. The approval process takes too long, and funding limits are too restrictive. For short-term commercial investment property loans, flexible solutions are preferable.

Hard Money Lenders

Savvy investors value speedy approval processes and greater access to capital. Hard money lenders fund deals based on the value of a piece of property. If your business plan is solid, you get a loan.

Real estate entrepreneurs turn to these lenders because:

Quick approval processes enable faster reaction times.
It’s easier to qualify with lousy credit or limited down payments.
Loan amounts based on After Repair Value (ARV) provide funds for renovations.

These loans feature shorter terms and much higher interest rates. They help to “bridge the gap” while exploring other options. A landlord might take a hard money cash out refinance deal to upgrade a property while searching for a conventional loan.

Private Party Lenders

These loans are very similar to hard money lenders but less formal. Instead of a professional mortgage company or investment firm, your loan comes from a wealthy benefactor. Some investors seek loans from family and friends. Others find help from their network of professionals.

We help investors like you finance opportunities with the solutions that match their goals. Contact us and let us help you find the best loan for your investment property.

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