What is hard money? Who uses it, and Why?
The What
Simply put, hard money loans are funded by private investors. VestCap has a pool of private investors that we originate and underwrite for. Hard money loans are primarily short term bridge loans used for acquiring properties that require cash to close.
The Who
Primarily, Real Estate Investors that are flipping rehab properties would most benefit from the program. They can truly leverage opportunities with minimal personal investment, thus maximizing their overall Return on Investment.
The Why
Hard money Loans are easier to qualify for because they are asset based and rely less on credit. With current lending restrictions the uses for hard money has expanded into many different applications.
Investors commonly use this type of short term financing for acquiring both residential and commercial properties that are in need of repair at a deep discount and do not qualify for conventional financing. This is very common in residential REO purchases. VestCap we will finance up to 100% of the purchase price and repairs.
This allows the “Flipping” investor to leverage his capital and capture more opportunities.
- The After Repair Value is considered in the transaction where conventional loans merely use the purchase price when calculating LTV ratios.
- Credit is not considered for approval.
- Poor credit Okay!!!
- Prior BK or FC is okay!
- Programs designed for Investors and Flippers.
- Common sense underwriting.
- Close Quickly (usually within 10 days)
- Leverage your capital to do more deals simultaneously.
- Will fund into an LLC or Corp.
- Properties with “functional obsolescence” are welcome.
- Make all CASH offers with confidence, allowing you to get lower offers accepted.
- Win over REO Agents who will know you close when you say you are going to close.
- Get motivated sellers excited to be dealing with someone who can close quickly.
- Assignments are okay