In this day and age it is both easier and harder to become successful than it was in the past. It is easier because of technology and the availability of free information. At the same time, it is harder because the ease of and availability make success possible for so many people that competition is created at an alarming rate. If you’re trying to be a realtor, for example, you will have to compete with those already successful in your market, as well as those barely entering. In this article, we will be discussing some aspects of real estate, and how hard money lenders can be used in this business.
Real Estate & Hard Money Lenders
In basic terms, real estate is all around us. It is any type of land or property that can be bought and sold. This includes residential property such as houses, condos, and mobile homes. You also have commercial property which includes offices, apartment buildings, hotels, malls, and other buildings. Then you have industrial, agricultural, City and Governmental, and land.
Within these categories there are different ways to make money, even if the person trying to purchase the piece of property doesn’t have all the money required to do so. Here is where we start talking about private money and hard money lenders. A hard money loan is defined as a loan that is secured by real estate. This means that a group or a person can give you a hard money loan to purchase and build on a piece of land, but the drawbacks are that the lender gets to be in what is called “first-lien position”. If the house were to not sell, or the borrower couldn’t pay the loan back, the lender would foreclose on the property and become the owner for the amount of the loan. When the house sells in the future, the first lien holder gets paid before the other lenders if there were any involved.
Hard money is most often used to do what is called a “fix and flip”, where capital is needed to purchase single family residence and to do the needed updates. The property is then resold on the market and the lenders get paid within 6 to 8 months. You can find various Nashville Hard Money Lenders, and many other hard money lenders across the United States.
In conclusion, in this article we discussed some of the aspects of real estate available for profitable ventures. One of the most popular, and one of the quickest ways to become a millionaire is fixing and flipping properties. However, not many people have a few hundred thousand dollars to buy the house and renovated it, so most use hard money lenders to be able to close on the deal. After the property is fixed, sold, and the money is collected, the hard money lenders get paid for a percentage and the buyer can go and do another fix and flip.
