REAL ESTATE INVESTING
This page provides the basics to real estate investing through fix & flip and fix & hold investments.
Any time you are accessing the feasibility and profitability of a real estate investment, you should 1st determine your exit strategy.
Your target neighborhood, property size/type, financing, renovation scope, and other factors will be affected by your plan to sell the property upon completion of renovation, hold it short-term or long-term.
What are Hard Money Loans?
Hard money loans are short-term, asset-backed loans secured by the value of real property, a hard asset, rather than the income and credit history of the borrower. Because hard money lenders lend based on the value of the asset, they can fund more quickly, and with fewer application requirements. Banks have a time-consuming, paperwork intensive process, which is often not the best option for real estate investors. Hard money loans may have lower down payment requirements and are issued by private investors or specialized hard money lending companies like Aloha Capital. Interest rates are typically higher on hard money loans than conventional loans because of the higher risk taken by the lender.
Why should I use a Hard Money Loan?
Hard money loans are best suited to capitalize on your time-sensitive real estate opportunities, when you need a loan quickly and a bank cannot meet your deadline, or when you can’t get conventional credit. Hard money loans are a great alternative for fast, short-term financing with an easier application process and quicker approval.
Common reasons real estate investors use hard money lenders:
- We value your time
- A fast, simple application process to quickly close the deal
- Borrowers can focus on their core business and spend less time dealing with an array of investors and banks
- For repeat borrowers, one phone call can get your deal funded
- The profit potential of a good opportunity outweighs the additional cost of a private loan
- The frustrating and time consuming nature of bank bureaucracy
- Self-employment income is viewed positively by private lenders, as we are small business people ourselves
- To capitalize on an outstanding opportunity, when you do not have sufficient cash or can’t get conventional credit quickly
Aloha specializes in understanding your deals and funding them in a reliable, timely manner. Unlike bank lenders, you are able to speak directly to our underwriter and make the case for your unique situation.