Beginners Funding Source for Real Estate
youtu.be
The video discusses the benefits of using hard money lenders for real estate investing. Hard money lenders are companies that lend money to investors who want to buy and renovate properties quickly. They are more flexible and willing to take on riskier deals than traditional banks. The speaker explains that hard money lenders exist for three main reasons: they can close deals quickly, sellers of investment properties want to sell quickly, and they understand the real estate investing space.
The speaker offers tips on how to effectively use hard money lenders and build relationships with them. They emphasize that hard money lenders heavily weigh the approval of the loan on the quality of the deal, not necessarily the borrower's credit score or experience. Hard money lenders act as a second set of eyes on the deal, almost like having a partner. They will look at the deal to make sure it makes sense and may even suggest changes or red flags to the borrower.
While hard money lenders are more expensive than traditional banks or other funding sources, with rates ranging from 10 to 15% or more, the speaker argues that paying a little extra to get a deal done is worth it, especially if you don't have the money to do the deal otherwise. The speaker advises that investors should build the cost of borrowing money into their rehab budget, assuming that the rehab will cost more due to the expense of borrowing money.
The speaker advises focusing on local hard money lenders and developing relationships with them, even if they are more expensive. Local hard money lenders may lend more money than national lenders, up to 75% of the loan-to-value ratio, meaning investors may not have to put any money down on the property. However, investors will still have to make monthly payments to the hard money lender.
The video discusses the benefits of using hard money lenders for real estate investing. Hard money l