How to Borrow Money Fast?
The world runs on money. If you need something done, chances are you need money to accomplish it. In the Real Estate Industry, getting funds fast is vital if you want to quickly refurbish a property you bought and sell it for a profit. The fix and flip market are incredibly cutthroat and competitive; even the slightest edge in time could mean the difference in beating your competitors. As such, it’s essential to know what types of loans are suitable when you are under time pressure.
Two fastest loan types
Hard money loans and Private loans are the two fastest loan types in the Real Estate Industry. These two are largely similar in that they both lack the bureaucratic red tape of the more institutional and conventional bank loans. This more streamlined approach to loans is because both types don’t have long scrutinizing processes for applicants.
Hard money is a short-term loan that focuses on the value of the real estate property used as collateral and its ARV or after-repaired value. It does not focus on the borrower’s credit ratings and credit history; this would allow for a quicker agreement that would satisfy both parties because Lenders don’t need to spend as much effort and time in examining a loan application, and borrowers don’t need to present a lot of paperwork and information.
Hard money loans are used by property investors who wish to refurbish and sell the real estate used as collateral within a year or less of acquiring the property. Hard money may have higher interest rates, but the quick payment of loans offsets that.
Private loans are from individuals who have the capital and are willing to shoulder the financial burden of a Property Investor. It is simply a loan from a private individual, usually a relative, friend, or colleague or even a private organization. The time frame of a private loan largely depends on the parties involved, but they are relatively on par with hard loans and are quicker than conventional loans. Hard loans and Private loans quite similar, but they are different in that hard money loans use a hard asset, primarily real estate, as collateral. However, both types of loans don’t have the long process of combing through an applicant’s financial documents and verifying his income. There are also fewer criteria and rules that weigh down conventional loans.
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