How Do “Hard Lenders” Make Money?
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Hard money lenders are specific asset-based loans based upon the value of a property today such as an 80 unit multifamily apartment or some other type of commercial real estate, and are expensive because of the inherent high risk of the loan.
There is very little income documentation required on a hard money loan although, the more information that is available, the better chances you have of being approved.These hard lenders step in during a time of need and give you a quick answer and get you to the closing table fast.
The shorter the duration of your hard money loan, the better for you and the lender.
Or some other examples might include: The property may not be completely constructed, the retail or office space not leased or you may not have the necessary permits in place and your existing note is coming due.