Hard Money Loans in Detroit
Suppose that you've encountered this excellent bargain on a fix and flip property in a terrific location, and you are either a seasoned real estate investor or a newbie who is looking to try out flipping houses. Professional home flippers, such as the young couple on Flip or Flop, HGTV's reality flipping show, are capable of earning a gain of forty to fifty grand for most homes. No need to explain that their past experiences rehabbing, knowledge of hard money loans, expertise in their market, and auction talents have had a big role in their results. With that being said, you have likewise been brushing up your rehab and renovation knowledge, have got a contractor ready for the project and are positive that you can do a stellar job for this house.
But funding is usually a separate problem altogether. A traditional lending institution, like for example a bank, takes a minimum of 1 to 2 months to authorize the loan and provide the funds. So if you're looking for a fast closing, it's important to be aware that this will cost you a couple of weeks, causing you to miss out on the home.
With banks establishing tougher loan standards in the recent past, it is now more challenging for a self-employed individual to obtain a mortgage loan, especially if his credit rating is not flawless. So must you admit defeat and abandon your aspiration to venture into the real estate market? Absolutely not, given that you also have the Detroit hard money loan alternative.
If you obtain a hard money home loan in Detroit, you will get what's perhaps most vital to real estate offers throughout the country — a very fast closing of around two weeks. Additionally, loans are made up to 70% loan-to-value of the "as is" house value, as determined by a qualified appraiser. At first glance, hard money real estate loans, with starting interest rates of 10%, appear to be higher in price than bank financing. But the time frames of these loans are quite short, making the rate much less important. Short-term loans of a couple of months to a handful of years are best understood as cost of capital, much like every other expenditure in connection with a project. After you renovate and unload the property, recuperating this expense is the same as recuperating the expense for stainless steel appliances you installed in the home.
Apart from this, hard money mortgages are not difficult to qualify for, even if you have a weak credit score. Rather than focusing exclusively on the applicant's credit score or net income, Detroit hard money lenders, who can be a privately owned company or an individual person, approve a loan as a result of assessing the property value, ease of marketability, where it is located, and the possibility of recovering their money in case they have to foreclose the loan. How much money an applicant can put upfront for the property, his past real estate experience, and selling price of equivalent properties in the neighborhood are other details that go into analyzing an individual's eligibility for a hard money real estate loan.
So in case you have stumbled upon a really great fixer-upper with a high potential for returns, you've also discovered a hard money lender in Detroit that is prepared to provide funding for your fix and flip project. Complete the contact form or get in touch with us via phone and let's talk about the property or properties you have in mind.
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