Hard Money Lenders: Healing a Damaged Market
Jul 29, 2016
While the real estate crash that started in the mid 2000′s might seem like ancient history now, it still has ripple effects on the market. In some parts of the country, investors can still buy properties at deeply discounted prices as a result of it. Unfortunately, many of those investors are also locked out of the market because their credit or their finances were harmed by the downturn. Today, the hard money community is providing the necessary liquidity to keep these investors in the market and fuel the real estate recovery.
Making a ‘Good’ Loan
Lenders of all types share a common desire. They all want to make good loans. Where they differ is in how they define good loans. Lenders agree that a good loan is one that earns them interest and one that pays them back. For a bank, a good loan is also one that meets an extensive set of conditions that may or may not have anything to do with earning interest or getting paid back. For a hard money lender the asset is the deciding factor in whether or not to issue a loan.
Commercial Hard Money in the Economy
Commercial hard money lenders assist the economic recovery by increasing the amount of capital available to investors. For example, a bank would look at a good investor with damaged credit because of foreclosures in the recession as a bad risk. A private lender, on the other hand, would judge that investor’s skill based on his ability to find a suitable property and judge their worthiness based on their ability to make a sizable down payment.
Hard money lenders also judge properties differently from traditional lenders. To a hard money lender, a property is worth lending on if it has value. This broad standard lets them lend on distressed properties that banks wouldn’t touch. Because of their open mindedness, hard money lenders are providing the capital that rehabilitates communities across the country.
Ultimately, hard money lenders aren’t in the business of judging investors based on what happened to them in an unprecedentedly weak market. Instead, they understand that bad things happen to good borrowers and are willing to overlook a spotted past. Thanks to this, hard money is keeping skilled investors active and helping neighborhoods recover, all across America.
Riverdale Funding commercial hard money lenders make a loan solely on the value of property, and accept all credit scores and financial histories. If you think your property qualifies for a hard money loan, contact us today for an evaluation!