Developers and home builders sometimes have trouble finding financing for their speculative real estate ventures. Traditional financial institutions don't always feel comfortable lending funds for empty retail spaces or spec houses. Tying up cash by making a personal investment may not be feasible. Another possibility for Washingtonians, are the hard money construction loans Seattle lenders will make, if you qualify for them.
Developers use these kinds of loans all the time. They get comfortable with the fact that the cash has to be repaid within twelve to twenty months, and that the actions of the lenders are not regulated by the Federal Reserve. There are private investors who cut corners and are basically loan sharks however. Finding a reputable lender should be your first priority.
There are pros and cons to using these lenders. They have the ability to approve your application quickly and fund your project just as fast. If you are in a hurry, they can be very convenient. The transactions are short term though, and the interest rates are high.
These loans are good options for developers who have some credit issues. The investor is more concerned with the worth of your collateral than how high your personal credit scores are. You will need to present architectural plans, contractor bid sheets, and detailed construction budgets. The lender will be interested in the stability of the area in which you propose to build, the market history, and any comparable sales.
Your credit history may not be the primary concern, but you will probably have to provide copies of tax forms, bank statements, and pay stubs. If you can give evidence of past development and building successes, that will help. Even when you are approved, you won't get one hundred percent of the cash you need.
Hopefully, you will have contacted a lawyer to look over your agreement with the lender before you signed it. Since these types of loan don't come under the guidelines of the Federal Reserve, you need to make sure you are protected. You should understand how much interest will accrue and what your personal liability will be if you default.
Since the lender can okay a project within a matter of weeks, you need to have everything in place to start immediately. You have to be prepared to have cash on hand to pay for underwriting fees and closing costs. Contractors, architects, and suppliers need to know what the turnaround time is. If the loan is for twelve months, the project has to be completed and sold by then.
Hard money loans are convenient for builders who need financing for construction. Banks prefer to loan money for lower risk projects that are finished and leased. You can always take out a hard money loan to cover the cost of building a project and apply for a long term loan, with lower interest rates and a longer approval period, to operate your completed development.
Developers use these kinds of loans all the time. They get comfortable with the fact that the cash has to be repaid within twelve to twenty months, and that the actions of the lenders are not regulated by the Federal Reserve. There are private investors who cut corners and are basically loan sharks however. Finding a reputable lender should be your first priority.
There are pros and cons to using these lenders. They have the ability to approve your application quickly and fund your project just as fast. If you are in a hurry, they can be very convenient. The transactions are short term though, and the interest rates are high.
These loans are good options for developers who have some credit issues. The investor is more concerned with the worth of your collateral than how high your personal credit scores are. You will need to present architectural plans, contractor bid sheets, and detailed construction budgets. The lender will be interested in the stability of the area in which you propose to build, the market history, and any comparable sales.
Your credit history may not be the primary concern, but you will probably have to provide copies of tax forms, bank statements, and pay stubs. If you can give evidence of past development and building successes, that will help. Even when you are approved, you won't get one hundred percent of the cash you need.
Hopefully, you will have contacted a lawyer to look over your agreement with the lender before you signed it. Since these types of loan don't come under the guidelines of the Federal Reserve, you need to make sure you are protected. You should understand how much interest will accrue and what your personal liability will be if you default.
Since the lender can okay a project within a matter of weeks, you need to have everything in place to start immediately. You have to be prepared to have cash on hand to pay for underwriting fees and closing costs. Contractors, architects, and suppliers need to know what the turnaround time is. If the loan is for twelve months, the project has to be completed and sold by then.
Hard money loans are convenient for builders who need financing for construction. Banks prefer to loan money for lower risk projects that are finished and leased. You can always take out a hard money loan to cover the cost of building a project and apply for a long term loan, with lower interest rates and a longer approval period, to operate your completed development.
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You can find details about the benefits of taking out hard money construction loans Seattle companies offer at http://www.privatecapitalnw.com/construction-loans right now.
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