If you’re a real-estate investor and your last deal didn’t quite pan out the way you planned, you might find your credit in ruins and yourself unable to secure new financing. Even so, you still have options which can enable you to continue investing in real-estate, I.e., Hard money.
If your not aware a hard money deal is secured by the “hard asset,” being purchased, which means that your current or past financial difficulties aren’t at the forefront of a hard money providers mind. If there is enough potential in your real-estate investment, this type of lender may be willing to overlook your financial difficulties, including bankruptcy.
Hard money providers consider the value of your investment, instead of your financial situation. However, this type of lenders willingness to overlook your financial difficulties will vary and will depend on their appetite for risk.
Nevertheless, credit is basically a non-factor in the case of hard money, and you may qualify even if you’ve undergone a recent bankruptcy.
Note however that under Chapter 13, you will have to negotiate any hard money deal with your previous lenders; so under Chapter 13, it might be impossible to secure hard money financing.
But even if you can qualify for hard money, is this the right financial solution for you?
To avoid the pitfalls that come hard money carefully evaluate your situation. Arizona Hard money loans are best used for real estate investments and you should not consider them a long-term solution to your current financial issues.
Hard money is probably not an ideal solution for general day to day financial issues. In most cases, hard money is meant exclusively for investment in real estate. That is because it’s the value of real estate secures most Hard money deals.
So, unless you are willing to pledge your primary residence to secure this type of loan (probably not a good idea if you can’t pay your current debts), don’t consider hard money as the best solution for personal financial issues.
Hard money is also not a long-term financial solution. This type of lender charges more in interest because of the risk they take in overlooking your credit score. Most hard money deals are for the short-term and are usually paid off by the resale of the property being financed. In the case of hard money, your aim should be to pay the loan off as quickly as possible. Note however with hard money there is usually the option to refinance to a less expensive loan after your financial situation improves.
Basically, Hard money gives you options. Hard money providers can look past a recent bankruptcy because credit is not their primary consideration. Nevertheless, hard money is not the way to overcome personal financial difficulties, as this type of loan should be used to invest in real-estate.
In the case of hard money, always have a plan in place to pay the loan off as quickly as possible, either through the sale of your Arizona Investment Property or refinancing.
Still, hard money enables real-estate investors in the midst financial turmoil to continue making deals and purchasing new properties.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.