Investing In Hard Money Loans In California For Real Estate Investors

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Investors Investing In Hard Money Loans In California

This ARTICLE On Investing In Hard Money Loans In California For Real Estate Investors Was UPDATED On November 29th, 2018

Investing In Hard Money Loans In California can be a safe and lucrative way of investing money because as a hard money lender, the investment is secured by real estate.

  • Most hard money lenders require that the hard money loan borrower have skin in the game
  • They normally require at least 20% to 50% equity
  • On a hard money purchase mortgage loan, lenders require that the property investor put at least 20% down payment to 50% down payment
  • The down payment requirement depends on the following:
    • type of property
    • experience of the real estate investor
    • strength of the borrower
  • On a refinance hard money loan transaction, the lender requires borrower have at least a 75% loan to value or less
  • Again, the amount lender is willing to extend credit depends on risk of the borrower and the type of property
  • Investing in hard money loans can be very lucrative
  • Investors investing in hard money loans in California can easily get double digit annual returns on their money that is secured by real estate

Investing In Hard Money Loans In California On Purchases

Days of state income loans are long gone and there are no signs of ever coming back.

  • The 2008 Real Estate and Market Collapse has totally wiped out most fix, rehab, flip mortgage lenders
  • This caused a stand still for real estate investors, real estate developers, and property rehabbers
  • Many property flippers rely on cash to purchase a property, fix, and flip and use the proceeds from the flip to do another project
  • Now that is not the case
  • Fix And Flip Rehab Loans is now offered by most commercial lenders
  • Due to Hard Money lenders and/or Private Money lenders, real estate investors, real estate developers, and property rehabbers can turn to short term hard money rehab loans for short term bridge financing in California and other parts of the country:
    • So they can acquire property, fix them, sell them for a profit or refinance them for an end loan and keep them as rentals
  • Most hard money lenders require at least 25% down payment on a hard money purchase loan transaction
  • Hard Money Lenders may require more down payment for inexperienced real estate investors
  • Most hard money lenders in California do not normally have pre-payment penalties
  • All hard money lenders expect an exit strategy on all of their borrowers
  • Most hard money loans are short term loans:
    • with normal terms being six months to no greater than 24 months
  • Hard Money Loans normally close in two weeks and are used for short term bridge financing
  • Hard Money Loans require little limited paperwork unlike standard commercial loans

Investing In Hard Money Loans On Refinance Mortgage

Many property owners have investment properties that have equity but need work and/or is not bankable due to needing repairs.

  • Banks and traditional commercial lenders will not lend on a property that does not generate any income:
    • Or is in need of major repairs no matter how good the borrower’s credit is
  • This is how short term commercial borrowers can utilize the services of a hard money lender and/or private money lender
  • Short term commercial borrowers can utilize the services of a hard money lender to get short term bridge financing to repair property and get it stabilized
  • Once stabilized, real estate investors can seek the services of an end lender, such as Gustan Cho Associates, and get a long term low interest rate traditional conforming commercial loan

Exit Strategies

All Hard Money Lenders want to know the borrower’s exit strategy.

  • Hard Money Lenders are short term lenders:
    • Lenders do not want to keep the loan in their books for long term
  • Most hard money lenders want to keep the loan in their books from one year to three years
  • Example of exit strategies may be just to buy, fix, and flip
  • Other times may be to buy, fix, and refinance to an end lender and keep the property as a income producing income property
  • Other exit strategies may just be to purchase a fixer upper, not do anything to it and just resell it for a small profit as a fixer upper flip to another investor

Hard Money Loan Programs In California

Gustan Cho Associates Mortgage Group are experts in short term commercial hard money financing.

  • Unlike other hard money finance companies, we are different than other hard money lenders in California
  • This is because we offer full service from originating, underwriting,¬†funding, and servicing short term commercial hard money financing to helping borrowers with the end financing through its preferred end lenders
  • Gustan Cho Associates will assist borrowers re-establish their credit with borrowers who have bad credit or lower credit scores or for self employed borrowers
  • We assist borrowers to structure tax returns and financials as well as profit and loss statements so borrowers are ready for end financing
  • Investors who are looking for a great return on their investments, investing in short term commercial hard money loans may be a great addition to an investor’s investment portfolio
  • We are a national alternative lending network of commercial and residential mortgage professionals
  • We have great concentration of our business in the state of California
  • We offer no doc fix and flip rehab loans in California
  • We offer no doc blanket lines of credit for real estate investors in California
  • Hard Money Financing is a great tool for real estate investors who need fast closings and limited paperwork

For more information on investing in hard money loans in California or real estate investors who need short term hard money rehab loans, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. California real estate investors can email us at gcho@gustancho.com 7 days a week, evenings, weekends, and holidays.

Related> Funding of Private Money Lenders

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