Have you already found a property you want to fix and flip, and you don’t have money? This problem affects many real estate investors in Savannah, GA, and all over the U.S. To help you decide that you finally want to obtain money loans savannah, GA, we will discuss other financing options in this article. The advantages and disadvantages of each method will be included to help you make comparisons.
Table of Contents
• Real cash
• Private money from a private lender
• Hard money loans from a private company or individual.
• Conclusion
Real cash
If you have the power of money in your hand, you will not have a problem grabbing any real estate business deal. Having enormous savings for buying properties at once is the dream of every real estate investor.
Advantages
• You can own property right away when you pay in cash
• You can refinance later on and draw most of the equity out of the asset
• No need to deal with paperwork or lending restrictions, and you can save time
• You can avoid all the costs that are associated with borrowing a loan
Disadvantages
• It is not many Americans that can avoid saving about $200,000 or more to buy a home
• You cannot take advantage of multiple deals at once when the home purchase exercise consumes all your cash reserves.
Private money from a private lender
If you have private lenders in your network, you can borrow their money and refund it as soon as you can. Unlike hard money lenders, private lenders within your circles are not necessarily licensed or regulated. They can offer access to a credit facility line or give a loan, depending on your business deal.
Advantages
• Same-day deposits can be expected based on the lender you are dealing with and your real estate loan size.
• No serious check and balance systems for wire transfers. No paperwork either. The process is considered more comfortable.
• The favorable cost of obtaining your loan can be established over time. You need to be a regular customer to negotiate cheaper loan rates.
• A private money lender is likely to be known in your local area.
Disadvantages
• A private lender has a lending limit. If you want to do many deals at once, or a massive deal, they may not have enough funds to give you
• As a first time borrower, you can encounter an interest charge of as high as 14 percent
• They lack consistency and are not reliable when you want to scale and enlarge your business empire
• Poor customer support is possible when dealing with a private lender.
Hard money loans
These are the best choices when it comes to house flipping projects. They are also called the fix and flip loans. These loans have a shorter term than mortgage loans and better alternative to real cash or private lenders discussed above.
Advantages
• If you want to scale and enlarge your property flipping business, choose hard money loans. They have consistency, meaning that the processing of loans is done the same way each time. Also, you can borrow the same amount every time or decide to increase or reduce it. These lenders are flexible enough to afford this.
• Quick access to capital. These lenders usually are registered and licensed businesses. They have no reason not to expand their establishments. The authorities recognize them. So they are open from morning to evening every business day. You can come in and apply for a loan and get it in a matter of days.
• Economical in the sense that there is no time wastage. With minimal documentation to verify a borrower’s background, hard money lenders are the fastest entities around.
• You can do multiple businesses at once as you have access to a five-million dollars credit facility that can never run out of cash. This is not the cash with private lenders: family and friends and private lines of credit.
• There are experts you can consult if you need advice urgently. Hard money lending companies are run by real estate gurus with ample knowledge of the sector. With a feasibility team ready to review the scope of your work, you can be sure of success.
• Top customer care support can be expected.
• Can accept people with bad credit, foreclosures, short sales, and no formal employments as long as they can prove that they can pay back their loans.
Disadvantages
• There is a limit when it comes to the amount of financing your project. It would help if you had a lender who can finance up to 90 percent of the asset’s purchase price
• Upfront fees and more extensive deposits are charged to verify that a lender is serious about borrowing the loan they want.
As you can see, hard money loans have more advantages as compared to private lenders. Best Hard money lenders Savannah GA are more consistent, flexible, timely, and ready to help you every time you come to them. To get money loans savannah, GA, talk to BridgeWell Capital. They have the best loan rates, the best loan terms, and various real estate loans to offer you.
