Sunday, June 08, 2014

Real Estate Investors now using Hard Money


 PRLog (Press Release) - Apr. 30, 2014 - KEY WEST, Fla. -- Per Fred Mullins, Top Producing Member of Team Mullins at Coldwell Banker Schmitt:If you’ve been considering buying a property to “fix and flip”, whether it’s to sell outright or to rent; or, you want to convert a property into a residential home, you’ll find traditional banks, credit unions, and mortgage brokers won’t be so eager to finance your venture.

The reason is because these sources don’t consider future opportunity; they look only at the risk.

This is where hard money financing comes into play. It allows someone to get the money they need to do something like buy a distressed property to rehabilitate it and sell quickly or to rent as an investment. In addition, it’s also a route to financing for someone who wants to convert something like a commercial property into a residential one.

What are Hard Money Loans?

Unlike “traditional” financing, approvals are given on the basis of the property’s value and/or projected value and not the borrowers credit score. The funding is made available generally through a pool of investors, such as an equity group, looking to capitalize on their investments quickly.

The downside is the interest rates are typically substantially higher than a regular, 30-year fixed mortgage. Often, points are assessed on the loan, substantial collateral is usually required, and payments must be timely. On the other side, approvals don’t take nearly as long as a regular mortgage application, properties all types can qualify; and, it’s a more straightforward process.

In short, this is an alternative source for financing a property, particularly a home to flip for profit.

Fred Mullins has more than 16 years of cross functional experience in real estate, international asset management and construction management. He has been a part of the management team for several Fortune 100 companies, including AT&T, Visa, FPL and C. B. Richard Ellis. His responsibilities have included real estate / property management portfolios of more than 9 million square ft. and international responsibilities in more than 10 countries.

Fred holds an MBA, B.S., real estate license, mortgage broker’s license, USCG Master Captains license and commercial pilot’s license

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