When most people think about financing real estate, talking with a mortgage broker or going through a traditional lender are the first thoughts that comes to mind. Although these are great options for the normal consumer, they don’t always fit the needs of investors – especially those who focus on fixing and flipping properties. Instead, it’s not uncommon for them to avoid traditional financing altogether and opt instead for much more advantageous rehab loans.
If you have experience with fix-and-flip real estate projects, you’re probably well familiar with hard money loans. In fact, they’re the preferred method of project financing for many real estate investors for short-term projects. If you’re not familiar with hard money loans, you should keep reading. Their popularity is due to the fact that they are easy to get, they don’t rely solely on your credit score or assets, and they are a much quicker alternative to traditional methods for financing the purchase of a home.
One thing that makes real estate investing really stick out as a great wealth-building tool is the ability to leverage other people’s money to drastically improve returns. These loans allow investors to afford much more expensive properties than they otherwise could, increasing the profit made on each transaction.
The problem with obtaining traditional loans is that they’re not always that easy to get. There are countless problems that can come up along the way, leaving hopefully investors left with few alternatives.