Most people think of hard money loans for fix and flip properties – the properties you buy for little money, fix up and flip in a few months. While that’s a good use for hard money loans, it’s not the only use.
What if you could use them to buy a rental property?
It could change your entire real estate investment strategy because you could have a property that earns regular income.
You don’t need perfect credit or a low debt ratio – there are ways to get financed and keep the property, earning monthly cash flow and capital appreciation.
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Why Investors Choose Hard Money Loans for Rental Properties
Hard money loans offer real estate investors many benefits including:
- No minimum credit scores
You can have a less than perfect credit score and qualify for a hard money loan to buy a rental property. Hard money lenders look at the collateral first, then your credit score. If you can prove you can repay the loan, your credit score won’t matter as much.
- You can have other debts
Most real estate investors have other debts, especially their own mortgage. With a hard money loan, you aren’t stuck with low DTI requirements, leaving you without the chance to finance your investment.
- Hard money loans fund fast
Sometimes investment properties go fast, especially if there are cash buyers. Getting a hard money loan is as good as being a cash buyer. Our lenders can get you closed in a short amount of time, making you a competitive bidder on the property.
- You may not need a large down payment
Most real estate investment properties require large down payments – sometimes 30% or more. Hard money loans don’t require such a high down payment because they focus on the collateral. Lenders know if you default, they can sell the property and make their money back.
Hard Money Loans for Rentals are Long-Term
You probably think hard money loans are only short-term. They often have repayment periods of as little as a few years. But hard money loans for rentals can be long-term, just like traditional loans. You could borrow money for 15 – 30 years with a competitive interest rate and the ability to fund your investment purchase.
What to Look for in Hard Money Lenders
If you’re looking for hard money lenders for a long-term rental, look for the following:
- Experience working with real estate investors buying rental properties
- Competitive interest rates
- Good reviews from past clients
- Fast funding
- Competitive loan terms
Final Thoughts
If you’re thinking of buying a rental property and need funding fast or don’t have perfect credit, let Save Financial help. We work with many lenders offering hard money loans for rental properties.
You can buy a rental property, hold onto it and earn monthly income to make your mortgage payment and earn a profit. With the focus on the property and not your credit, it’s a lot easier to become a real estate investor fast.
