Real estate offers portfolio diversity, and with careful planning and following a strategy, investors can build great wealth and financial freedom. Diversity can protect you from economic downturns in any one sector of the market, and real estate allows investors to live out their golden years on their terms, doing what they enjoy. In addition, passive income in retirement earned through real estate investments offers a hedge against the ravages of inflation because rental rates tend to keep pace with increases in the cost of living.
Hard money loans or bridge loans allow investors a quick and flexible solution to hold onto their cash while building their holdings using cash from someone else, a private money lender. This short-term financing option is typically to rehabilitate or develop a property and then sell or flip the property. Read on as we explore what Chicago & Suburbs real estate investors need to know about hard money loans
As with most things in life, you should consider both sides of what Chicago & Suburbs real estate investors need to know about hard money loans, including the drawbacks, though they are few. Hard money loans also come with a higher interest rate and have higher costs in general for processing. Additionally, they are for a shorter term than conventional loans, from between one to three years. If you don’t have around 25 to 30% to put down, they may also seek an interest in the property. With high payments due to the interest and short duration of the loan, an income stream from a sound investment helps repay the loan and save money. Make sure you fully understand the agreement and have performed due diligence on the investment property. The asset, or the property, is the security for the loan, meaning it is at risk should you default on the loan.
Conventional Loan Denied
For those who cannot pursue a conventional loan because of the risk of the investment or their credit status, Chicago & Suburbs real estate investors need to know about hard money loans, which offer flexibility because of their looser restrictions and the differing requirements for loans than conventional lenders.
Another thing that Chicago & Suburbs real estate investors need to know about hard money loans is a quick application and approval process. They make a great option to keep your investment business rolling with fast and convenient access to cash.
Something else Chicago & Suburbs real estate investors should keep in mind about hard money loans Chicago & Suburbs is that you can improve your standing by working with the same hard money lender repeatedly your interest rates can go down. As you gain experience, prooving your ability to make successful investments, you become less of a risk.
The professional investors at Better Way Real Estate LLC are local Chicago & Suburbs real estate investors with the know-how to help you understand how hard money loans can benefit your real estate portfolio. If you’re ready to start, let the professional investors at Better Way Real Estate LLC help guide you as you learn the ropes of real estate investing or help you handle your investments to sit back and enjoy your passive income. Let us help you find great deals in Chicago & Suburbs, don’t forget to ask about the current inventory at Better Way Real Estate LLC of the best investment deals available. Whether you are investing in flipping or needing help managing your properties and everything in between, at Better Way Real Estate LLC, we have a network of highly regarded local providers who offer a solution to get the job done right. Call Better Way Real Estate LLC at 630-448-8930.