Getting comfortable with hard money investing

Many real estate investors overlook hard money loans as a strategy for acquiring property. That's because these loans are typically used by desperate property owners looking for a way out of the real estate market, rather than into it. But hard money can work for anyone, and it can be particularly useful if you're a new investor looking to build your portfolio quickly.

Hard money loans can generally be described as high interest loans available to borrowers with any credit rating, as long as they can can provide solid collateral - usually equity in real estate, such as a home. These loans are almost never issued by banks or deposit institutions, but rather by private lenders who specialize in short term lending at high interest.

Normally a home owner in need of a big loan would apply for a second mortgage, using real estate equity as collateral, but bad credit can make things difficult here. If a home owner has missed a few mortgage payments, the banks may refuse to provide more financing - hard money might be the only option in this case.

The limit for hard money loans typically hover at about 60 to 70 per cent of a property's quick sale value, defined as the price a lender could reasonably expect to realize if the borrower defaulted on the loan, and the property was liquidated fast. The interest rate for a hard money loan is usually in the 15 to 25 per cent range.

Investors can take out hard money loans to buy a property, as long as they provide acceptable collateral - in this case it could even be the property they're buying. The strategy here is to find a pre-foreclosure property, or any real estate with an owner prepared to sell below below market value as long as the sale is fast. If the investor can re-sell the property at full market value, before too much interest is paid on the hard money loan, he or she can make a significant profit. Hard money loans have helped many successful investors get started in real estate.

Posted by Doris Edwine on December 29, 2008 at 07:42 PM

About Doris Edwine
I'm Realtor in Raleigh, North Carolina, with Northside Realty. I service the counties of Wake, Durham and Orange. When you are my client, you are like family and I make sure that what is important to you is important to me too. In fact, a large part of my business comes from referrals from past clients.D

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Local Information for Raleigh, NC

Latitude: 35.818835 -- Longitude: -78.64459

ZIP Codes for Raleigh, North Carolina	27601 27602 27603 27604 27605 27606 27607 27608 27609 27610 27611 27612 27613 27614 27615 27616 27617 27619 27620 27621 27622 27623 27624 27625 27626 27627 27628 27629 27634 27635 27636 27640 27650 27656 27658 27661 27668 27675 27676 27690 27695 27697 27698 27699
Area Code for Raleigh, North Carolina	919
Time zone for Raleigh, North Carolina	EST

Other Area Cities: Apex, NC Wake Forest, NC Holly Springs, NC Raleigh, NC Cary, NC Clayton, NC Knightdale, NC

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Raleigh is the capital of North Carolina. As of the 2000 census, it had a population of 276,093. Durham, Chapel Hill and Raleigh make up the three cities of the Triangle which is a research park created in 1959. Although the median home price has topped $200,000, homes are available in all price ranges, and the area is still more affordable than many other regions with similar economies. Raleigh's proximity to both the Atlantic coast and to ski slopes in NC and VA make it an ideal location. Raleigh's temerate climate allows for year-round activities such as golf, hiking, biking, fishing - some even in the city thanks to the parks and greenways system. Some of the most renouned museums in the South are located in Raleigh, as well as the NC Symphony orchestra. The BTI Center for the Performing Arts is one of the best in the country. Sports fans will discover many outlets for their enthusiasm - from ACC basketball to college teams. -- Source: Wikipedia.com

North Carolina 2000 Census Population Profile Map

	Raleigh	North Carolina	United States
Population	276,093	8,049,313	281,421,906
Median age	30.9	35.3	35.3
Median age for Male	30	33.8	34
Median age for Female	32.1	36.7	36.5
Households	112,608	3,132,013	105,480,101
Household population	258,777	7,795,432	273,643,273
Average household size	2.3	2.49	2.59
Families	61,327	2,158,869	71,787,347
Average family size	2.97	2.98	3.14
Housing units	120,699	3,523,944	115,904,641
Occupied units	112,608	3,132,013	105,480,101
Vacant units	8,091	391,931	10,424,540

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Getting comfortable with hard money investing

Local Information for Raleigh, NC

Latitude: 35.818835 -- Longitude: -78.64459

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