Realtors and hard money lenders have the potential for a mutually beneficial partnership that can span a range of deals.
The speed and flexibility of hard money lending can help Realtors who are investors and those who are involved in a specific client deal.
Let’s take a look at the role of hard money lending in real estate, and why it’s beneficial for Realtors to work with hard money lenders.
Get Started with Park Place FinanceWhat is a hard money lender?
Hard money lenders offer more flexible loan options that are secured by real estate, rather than the borrower’s creditworthiness or financial history.
This form of lending allows investors to pursue projects that might not be feasible through traditional financing routes.
How does hard money differ from traditional lending?
The key differences between hard money lenders and traditional banks include:
- Asset-based lending criteria
- Rapid approval and funding in a matter of days or weeks
- A high degree of flexibility in loan terms
- Short-term and long-term options
Traditional lenders such as banks and credit unions prioritize the borrower’s financial stability and income when assessing loan applications.
They can take several weeks to months to process due to extensive credit checks, financial assessments, and regulatory requirements.
What is the role of hard money lending in real estate?
Hard money lenders fill a gap in the market left behind by traditional lenders.
They serve the following roles for real estate investors:
- Offer fast access to capital for purchasing properties
- Provide funding for renovations and construction projects based on the after-repair value (ARV) of the property or its potential value post-construction
- Support rapid decision-making and project initiation in competitive markets
- Help improve and revitalize properties and neighborhoods
- “Bridge the gap” between an immediate need for funding and seeking a permanent source of financing
Hard money lending is a critical tool for real estate investors that not only aids in the individual success of investors but also contributes to the broader health of the real estate market.
Why is it beneficial for a Realtor to work with a hard money lender?
A connection with a reputable hard money lender like Park Place Finance offers numerous advantages to Realtors, both with client transactions and their investments.
Realtors will be able to help clients who require more flexible financing solutions access the funding they need to achieve their goals.
Meanwhile, they also have the benefits of a partnership for their own diverse investment needs.
Let’s take a more detailed look at the advantages of working with a hard money lender for Realtors and their clients.
Fast closings
One of the most significant advantages of hard money loans is their ability to drastically reduce the time required to close on a property.
In competitive real estate markets, transaction speed can be a crucial factor in securing a deal.
Hard money loans can be processed and funded in a matter of days, compared to the weeks or months often required for traditional bank loans.
This rapid turnaround is especially necessary in situations where a property has multiple offers, allowing Realtors and their clients to present a more attractive bid with a quicker close.
Access to flexible financing
Hard money lenders offer a level of flexibility that is rarely matched by traditional financing options.
Loan terms, including repayment schedules, interest rates, and loan-to-value (LTV) ratios, often are customized to fit the specific needs of a project.
This flexibility is especially helpful for real estate strategies that require a non-traditional approach, such as renovations or bridge financing.
Investment opportunities
Hard money loans unlock numerous investment opportunities for Realtors, particularly in projects that require quick action or significant rehabilitation before they qualify for traditional financing.
These projects often include fix-and-flip ventures and construction loans.
Realtors can jump on opportunities that require immediate funding, increasing their investment portfolio and generating significant returns.
Dual role advantage
For Realtors who also invest in real estate, working with hard money lenders can aid their ability to serve clients while pursuing their own investment goals.
This dual-role advantage means Realtors can leverage their market knowledge and financing contacts to secure deals for themselves and their clients.
These types of projects not only add a valuable asset to a Realtor’s investment portfolio but also demonstrate to clients the Realtor’s expertise in identifying and capitalizing on market opportunities.
How to get started with a hard money lender
If you are a Realtor who would benefit from a hard money lender partnership for both your investments and your clients, the following steps can help you connect with the right lender:
- Do your research: Look for lenders with a strong reputation and a track record of supporting projects similar to yours
- Contact the lender: Call the lender or contact them through their website to introduce yourself and explain your partnership desires for yourself and your clients
- Submit your project details: If you have a project you currently need to be funded, submit basic details about your project
- Provide additional documentation: Supply any requested details or documentation, such as property information, renovation details, etc., as quickly as possible to keep the deal moving
- Discuss loan terms: Ensure you fully understand the terms and that the loan aligns with your project needs
- Receive your funds: Close in a matter of days or weeks, depending on your project details and scope, and receive your funding
As a Realtor, your goal will be to fully understand the hard money lending process for your own and your clients’ benefit.
This can help you facilitate the relationship between your clients and your lender, and provide additional support to clients who may be inexperienced with hard money lending.
Connect with hard money lenders Park Place Finance
Park Place Finance invites Realtors to explore the possibilities of hard money lending.
We offer the following hard money loan options:
Whether you are a new investor looking to dive into your first project or an experienced professional seeking to expand your portfolio, our team has the expertise, resources, and flexible financing solutions to support your goals.
Start here by supplying us with some basic information about your project goals and financing needs, or call us at (866) 407-1599.
Each borrower has access to a dedicated account executive who will support you throughout the loan process.