When most people think of real estate investments, they think of traditional loans in order to purchase these properties. However, this is no longer the only option. Bridge loans, otherwise known as hard money lending, can be the ideal way to invest in real estate. These loans are typically offered by private companies or individuals who are looking to invest but don’t want to take the hands-on approach. Unfortunately, this method isn’t right for everyone. Therefore, it’s important to evaluate it closely to determine whether you should consider a bridge finance loan the next time you’re thinking of investing in real estate.
Traditional Loans Don’t Work
One of the biggest reasons individuals think about obtaining bridge loans for their real estate purchases is because they have already been turned down by traditional lenders. Those who offer hard money loans typically have fewer restrictions and operate under a different set of regulations, which can make it easier to obtain the funding you need. They will be able to offer you more money than traditional lenders because they are often willing to take the risk and won’t have to base their loan off your own credit history. The choice is entirely theirs to make.
Going through traditional methods of obtaining a loan for real estate purchases can often take time. Banks and other traditional lenders can take days or even weeks to go over your finances before making their final decision and offering you a specified amount of money for your loan. Bridge loan lenders will typically be able to get you your money much faster so you can move forward with your investments and close on these purchases in a timely manner. With the quick turnaround, you reduce the risk you will miss out on the right investment.
Sometimes you want to invest in real estate that doesn’t fit the norms for real estate investments. If you were to ask a bank for a loan in these situations, chances are you would be denied the money you need. However, individuals and private companies willing to offer hard money loans are typically more flexible and willing to work with investors. They will be able to evaluate whether the type of real estate you want to invest in is a smart choice for them and are more likely to give you the funds you are looking for.
Bridge finance loans can be a great way to get the money you need for your real estate investments. While traditional bank loans are still sometimes the better option, for those who have been turned down, need the money more quickly or are looking at non-traditional investments, hard money lenders can often be a smart choice.