Common Myths About Hard Money Lending

Hard money lenders have become an increasingly mainstream source of alternative financing in recent years. Nevertheless, some potential and current investors lack a thorough understanding of what makes hard money loans a suitable funding choice.

Those who’d like to scale up their real estate business or investment projects need to leave a few misconceptions behind. Let’s bring to light a few common myths about hard money lending to clear the air once and for all. Here, we sort facts from fiction to ease any lingering concerns about the hard money lending industry.

Myth: Hard Money Is a Last, Desperate Resort

Oftentimes, people have a certain perception in mind about hard money. Outsiders and insiders alike tend to view those who stray from the conventional lending structure as desperate investors. This is far from the truth. Certain investors may only have hard money lending as a current option. All the while, this matter does not make hard money financing a last-ditch resort for those with lower credit or fewer assets.

Leniency is an advantage of hard money lending over conventional lending. Many consumers and businesses choose to obtain a hard money loan because of the grander-scale of available options. The faster closing times, more flexible terms, and variety of loan types available are pivotally beneficial. Many investors, brokers, and lenders alike can best leverage deals by utilizing hard money funding to their advantage. Those who truly understand the real estate market can see this untapped potential.

Myth: Hard Money Lending Is Too Risky

Living life every day comes with a plethora of risks. One of the common myths about hard money lending is that the financing option is a trap for modern borrowers. As a matter of fact, this misconception is not true. In actuality, the assumption that hard money lending is riskier than traditional consumer loans is not sensible.

Taking out a loan is purely like making a promise. Promises can be kept, but they also come with a bit of risk. You never know for sure what can happen. However, as long as investors can abide by the terms of the loan and have a reliable income to make payments, there is no additional risk involved. Hard money lenders take the necessary time to evaluate the project and property to ensure your success just as much as their own.

Myth: Hard Money Lenders Are Loan Sharks

Picturing hard money lenders as meager loan sharks is a relatively outdated depiction that does not speak the truth about experienced professionals in the industry. Many of your local hard money lenders are reputable business owners with successful backgrounds in accounting, real estate development, law, or investment banking. These well-established lending companies are as legitimate as banks for financing needs.

If you’re searching for a new lending partner, reach out to Val-Chris Investments. As direct lenders, we have the opportunity to provide our borrowers with creative solutions for the best terms possible. Our unique, customized loan packages and broker referral program benefit all involved parties. For happy clients, smooth transactions, and opportunities for success, start a loan application with us today.

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