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Leveraging Private Hard Money Loans for California Investment Property

Written by Posted On Monday, 17 December 2018 14:38
Leveraging Private Hard Money Loans for California Investment Property

As a private hard money loan specialist in California, I see a lot of different scenarios.  While rates on bank loans are going to be lower than what I can assist with, there are benefits to utilizing hard money for investors.  Depending on the situation, there are many different ways private hard money can help our clients.

One of the major benefits to the alternative, non bank lending solutions we provide is speed.  Our typical transaction funds in 2-4 weeks.  Sometimes we can get a loan closed in as little as 3-5 business days.  For anyone who has worked with the banks - especially those who are self employed or have other 'outside the box' aspects of their loan - this is clearly pretty quick funding.  For many investors, speed can be the difference between being able to take advantage of a deal and losing a deal.  This is true whether financing an acquisition of property or leveraging equity to take advantage of a business opportunity.

Another major benefit is the flexibility that using private hard money can afford.  Being able to blanket, or cross collateralize multiple properties can be a great advantage to an investor looking to use leverage on his or her existing real estate.  Being able to put a small second on a home or other property quickly to access equity, while not having to lose the advantageous existing loan is another.  Rehab and construction loans that allow investors to leverage the completed or after repair value of a property can also be a big advantage - especially when coupled with the speed of private money loans.

Leveraging seller carry backs or other subordinate financing is another aspect of private hard money lending that many do not think about.  For investors who are able to find deals where a seller is willing and able to carry back in a second position, we can often times treat that the same as a cash down payment by the buyer.  This can help the investor take advantage of a lot more leverage as they leverage not only the loan we assist with, but also the seller carry they have negotiated.  This can also create additional flexibility when there is existing debt on a property, allowing for partial payoffs with subordinations that many bank loans are not able to consider.

When dealing with private hard money, typically we are working on a 'make sense' basis.  If the deal makes sense to the investor and the borrower, often times there is a way to structure the deal to get it funded.  For those with credit issues, this can be great.  Credit is a funny thing.  Most banks and lenders rely on a credit score - regardless of what the report contains.  This number can dictate whether a loan gets done or not.  In some cases, clients may have no credit at all.  While some programs may be tied to credit for various leverage points, we are able to provide financing for almost any credit situation.  If there is equity in the property, a clear exit strategy and the deal makes sense, there is usually a structure to make it happen.

There are a myriad of other reasons to consider private money financing.  You can learn more by visiting our California hard money loans page, or by calling us anytime Monday through Friday 9-5.

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Chris Goulart

I specialize in California private hard money loans.  These are non-institutional financing options for business and investment purposes.  I can help with most property types in California.  Most of the loans we can assist with are equity based.  We are not typically credit driven.  Our loans include long term options as well as short term bridge loans, construction, rehab and unique financing options that the banks may not be willing to provide.

www.acalending.com

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