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Top 3 Advantages of Using a Hard Money Lender


Some people don’t consider using a hard money loan because it typically has higher rates and closing costs than a conventional loan. However, when you’re trying to acquire an investment property loan, a hard money lender could be your best option. Read these reasons why this kind of lender could be the solution to your investment needs.

  1. Lower Down Payment 

A conventional loan typically requires a down payment of 20-25 percent. That can be quite a lot of money to pay up front depending on the price of the property. For example, a $100,000 property would require $20,000-$25,000 up front without including any closing costs or renovation expenses. With a hard money lender, the down payment it usually 10 percent. That cuts your out-of-pocket expenses by at least half.

  1. Capital for Renovations

Many investors won’t purchase a property if it requires extensive renovations because it can require paying out of pocket to cover the renovation costs. Choosing private money lenders in California allows you the freedom to use the money you save from having a lower down payment to cover the necessary renovations. You can also include the cost of the renovation in your loan. For example, a $100,000 property needing $20,000 in renovations could be financed with a down payment of only $12,000 including the $20,000 renovation cost.

  1. More Easily Acquired for Investments

Traditional financial institutions such as banks and credit unions can be hesitant to lend money for higher risk investments such as real estate properties. Those are exactly the kind of investments hard money lenders specialize in, so it is usually a much simpler application and approval process for the borrower.

When you’re looking for an investment property loan, try using hard money lenders in Los Angeles. You might be surprised by the benefits they can provide as you work to make your property profitable. Think outside conventional loans and use a hard money lender today.

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