Hard Money Loans—California Advantages and Disadvantages

Doing your research on obtaining financing is a slow moving process, especially when researching hard money loans. California based lenders, however, are not afraid of you doing your due diligence thus they have clearly laid out the pros and cons of securing hard money financing.

HB_pierIf you are not new to the world of hard money financing, you more than likely feel like you are well versed in hard money loans. California lenders of hard money, however, are not your everyday lenders. In other words, each lender who offers hard money financing offers something a little bit different than the next lender. Consequently, you may not know everything there is to know about hard money loans. California base lenders, moreover, tend to focus on certain niches; therefore, you may only have knowledge of one particular niche.

With that being said, you may want to become clear on at least the top three pros and cons of using hard money. It is important to know the top three advantages and disadvantages of hard money because, as briefly suggested, your niche may be different then the next borrower’s or your lender may have slightly different requirements or conditions than your previous lender. The point here is that you will always have to do your research when approaching your next business venture or attempting to secure financing.

Therefore, you need to understand or rather be well-versed on the basics of what hard money financing can do and what it cannot do. Of course, the best way to go about being well-versed in hard money is to be clear on why borrowers, investors, and builders find a real benefit in using this particular kind of financing as well as why others are wary of using hard money for their venture.

Understanding those Universal Benefits
The top three advantages then include the ability to fund your project or commercial venture quickly with little to no waiting period for approval. If you are lucky enough to have all your ducks in a row, approval can happen same day once your lender looks at the basic of the potential property, available equity or down payment, your experience in the real estate market, your end game or exit strategy and of course what cash reserve you have available. Besides these basics, top reason number two is the fact that there aren’t really too many other requirements or at least there are not as many requirements as you would typically see with standard financing. Lastly, the third reason is the ability to fund that “unfundable project”.

Risk less by Staying Informed
More than likely you are aware of the top three disadvantages, but nevertheless, they include higher interest rate, short term use, as well as equity or a sizable down payment. The reality is that if you know exactly what you will use your hard money financing for and how long you will need it for, it is very feasible to risk less with hard money financing. Thus, no matter your niche and no matter your lender, you can stay on top of things and turn a profit if you do your research beforehand and stay informed during the entire process.

Happy senior business man making his notes at workDennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC 
Private Hard Money Lender

Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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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.

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