Hard Money Loans
Hard Money Loans, also called Asset Based Loans are a good option for rehab properties.
Hard Money Loans Fresno
If you have $50,000, you can start investing in real estate property, rehabbing and flipping homes, and building your retirement portfolio.* As a REALTOR®, I work with dozens of local, cash investors who realize a 5% to 25% return on their investment, and I can help you too.
Are you behind on your retirement plans? Like many of us, the 2006 recession put the brakes on our retirement savings, or drained our accounts. Unfortunately, we will never get those lost years back. But, real estate is one of the only investments where other institutions will loan you the money to get started in real estate investing. Take your own home for example. Your home is one of the biggest retirement assets you will have. When you purchased your home you didn’t pay for it in cash. You put 10% to 20% down, and the bank paid the rest. Over the course of 15 to 30 years, you will have paid off the loan. Not only will you have the full value of the property in your portfolio, but the property will have appreciated over time.
How Do Hard Money Loans Work?
Hard money loans, or asset-based loans, are short-term loans made by private lenders that real estate investors can use to finance an investment project. Unlike traditional home loans that are based on your creditworthiness, a hard money loan is based on the value of the property after repairs, also known as “ARV” After Repair Value. Hard money lenders typically invest up to 70% of the property After Repair Value. Here’s an example of a 120 day investment project:
- Property purchase price: $100,000
- Required repairs: $25,000
- Value of property after rehab (ARV): $165,000
- Hard Money Loan ($125,000 x .70): $87,500
- Cash needed by borrower: $37,500
- Cost to sell at 9% ($165,000 x .09): $14,850
- Hard Money Loan costs (points and fees): $5,000
- Net proceeds to investor: $20,150
- 120 day ROI: 53%
Remember, Hard Money Loans are an investment tool to start your real estate investment portfolio. Eventually, your goal is to have enough cash on hand to finance 100% of your real estate projects.
Eric McCormick Property Investor Advisor Goals
Is this everything you need to know about real estate investments and flipping homes? No.
Though real estate investing is a great opportunity, there are pros and cons. My first recommendation is don’t work with just any REALTOR®. It is extremely important that if you are interested in real estate investing that you work with a REALTOR® like myself who specializes in property investments. The margin for error is very small and overpaying for a property or not understanding the cost to rehab or sell could be disastrous. My goals are:
- To identify potential property for real estate investing
- To provide a market analysis to determine the purchase price, cost to sell and cost to rehab
- To find homes for sale that are not in the MLS and present my clients with a First Look opportunity
- To provide a comprehensive marketing campaign to sell the property for top dollar
If you are ready to invest in real estate call Eric McCormick, 559-304-4637.
*Results may vary depending on the property and circumstances. This is an informational page only and should not be considered investment, legal or tax advice. Investors should verify information with a licensed professional if important.