Michael is an active real estate investor in Florida, and also specializes in hard money financing options for other real estate investors. Being an investor, its easy to understand the importance of solid funding as a foundation for any real estate investing business. The keys to investing with minimal risk and maximum Return on Investment are within every investors reach with the proper use of Other peoples time and Other peoples Money. If you would like to learn more about using other peoples money for investment leverage, CLICK HERE to visit the website.
Investor Rehab loans (also knows as Hard Money Loans) are currently filling a need for investor who have an ability to find deals, but have found themselves unable to fund projects with conventional financing.
The Real Estate Game has changed greatly for investors. Stated income and No Doc loans have become very difficult if not impossible to obtain from conventional lenders. Of course the amount of opportunities in this post bubble burst environment is endless. With REO's, Short Sales, Pre-Foreclosures, etc... flooding the market, many investors may see opportunities on every corner. However more investors are finding themselves frustrated when attempting to locate sources to fund these opportunities.
Many investors therefore have turned to wholesaling, and utilizing double closings to generate revenues for their businesses. While this is great for instant cash infusion, it leaves something to be desired for an investor who is used to rehabbing properties and taking the lion's share of the profits by land lording or selling to an end buyer.
Rather than a traditional Loan to Value based on the purchase price of the property, value is determined based on After Repair Value or ARV. This value is simple to obtain, by looking at retail comparable sales. An appraiser or real estate broker may be able to assist you in determining an After Repair Value.
It is important to note that the Value is the most important factor when determining eligibility for a Residential Investor Rehab Loan. The lender has greater risks than that of a conventional lender, and by putting so much weight into the equity of the property, you can imagine how important the value becomes.
Most Residential Hard Money Lenders lend 60-70% of After Repair Value. Meaning that if you multiply your ARV by .70, you can see very easily what your maximum project costs can be. If you were considering a rehab project, it would be important to make sure that your purchase price, rehab costs, closing costs, and payments are under 70% of the After Repair Value. If you start every project with the end in mind, it is most beneficial.
An Investor Rehab Loan will give the ability to also include their rehab and closing costs into the loan. This is HUGE for investors who are having trouble locating in the first place. It allows the investor to truly leverage their capital to fund more deals simultaneously by rolling hard costs into their financing.
You can see how easy this makes the rehabbing process in comparison to traditional financing. Utilizing investor rehab loans will increase the overall Return on Investment for all projects, in addition to expanding the amount of projects that an investor can take on at one time. All in all, this type of funding can increase an investor's bottom line exponentially.
Qualifying for a Residential Investor Rehab Loan is different than qualifying for a conventional loan. Conventional lenders make it harder than needed when the numbers work for the investor and the lender.
To see if you Qualify for a Residential Investor Rehab Loan visit http://www.residential-hard-money-lender.com
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