Hard Money Lenders: Problems Where You Could Indulge In Hard Money Lender's Resolutions

Copyright (c) 2011 Sylvan Newby

It isn't unusual to hear mortgage industry associates refer to hard money lenders as a last measure. Although this could possibly be valid to the level that many credit seekers who obtain credit from hard money lenders do it as a last measure, there are many cases in which a hard money lender could be sought before a traditional financial company. Let's take a review of some cases where a hard money lender could be a first choice instead of a last resort.

Suppose a real estate developer has sunk $10 million into a development deal and initially arranged to market properties in January and would then start to regain their investments funds from the project. As is the truth with many such projects, gaps may push back the opening sales date or the venture could go over budget, leaving the developer with a cash negative position. The developer at this point have to get a bridge loan as a way to overcome his fund poor period in order to "thrive" until the venture starts to attain a cash positive position. Having a typical mortgage, the bank wouldn't push through the mortgage for the customer for 4 to 6 weeks. The developer would fall behind on his original mortgage or would not have money handy to finish off the project. The developer demands money at this point and oftentimes demands the money for just a two to four month period. In this condition, a hard money lender is the appropriate business partner as they can supply a mortgage fast and effectively.

Some other illustration of a hard money lender condition is a rehabilitation trader who requires a mortgage to fix up distressed houses which are non-owner occupied. Most banks would walk away from this loan for the reason that would be incapable to confirm that the rehabber are going to be competent to promptly sell the units for an income -- particularly with no current tenants to pay rent to take care of the mortgage. The hard money lender will, in all probability, be the sole lender willing to undertake such a project.

Another group who could use hard money lenders as a first step as opposed to a final measure are real estate investors wanting to "flip properties." If the investor finds a home that they regard to be a huge value, they may require quick and risk-free funding to take, acquire, renovate and sell the home quickly. Anyone aiming to flip real estate doesn't prefer to keep the property for a long time and the short term funding from a hard money lender will provide for this demand. The loan can also be prepared as interest only, retaining the expenses lower. As soon as the property is bought by the person who is flipping the property, the principal is repaid and the profit is held or reinvested into the upcoming venture.

One final case of hard money involves somebody who finds themselves in foreclosure. When a homeowner falls behind on their mortgage payments, most lenders will not allow them to have a mortgage or rebuild their current mortgage. Occasionally, someone who is struggling with home foreclosure will have a hard money loan to prevent foreclosure proceedings and use the time to sell the house.

A hard money loan is actually a commitment between a borrower in a tough position (either from a time sensitive perspective or because of their negative financial records) and a loan provider who's risk adverse and is willing to take a chance for a higher gain. While hard money lending may be a last resort for some, there are plenty of situations when hard money is the only solution.


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There is always a choice when it comes to your credit problems. Hard money lenders will be your last solution to step away from bank foreclosure. Visit www.hardmoneylenderssouthcarolina.com and find out how you can take advantage of this great plan.