Finding dependable funding sources for real estate investment deals has become significantly more difficult over the past decade. Not only does the entire RE industry have somewhat of a “black eye” but traditional lending institutions are more constrained by government laws and regulations than ever before. Real estate developers in need of investment capital should look to non-traditional sources such as hard money lenders as there are significant advantages to these private, knowledgeable and experienced lenders.

Conventional Lenders

Banks, credit unions and other traditional sources of real estate investment capital are highly regulated by state and Federal laws, closely monitored by both their shareholders and executive boards and almost completely unable to fund a deal that is, in any way, unusual. While conventional lenders are ideal for the average homebuyer who will purchase a single-family home with a down payment and a conventional payment schedule, they are singularly unable to deal with multi-unit properties, development deals or other complicated investment opportunities. 

Hard Money Lenders

Private, hard money lenders are a completely different animal. They are typically seasoned business people, often with a specific real estate background, who understand the need for reliability, versatility and speed. More importantly, hard money lenders do not answer to anyone but themselves when a decision needs to be made. Of course, their real estate deals are covered by the same safeguards as conventional real estate loans but, in terms of unusual investment deals, hard money lenders are infinitely more flexible than standard lending institutions.

The Obvious Choice

Hard money lenders are the obvious choice when it comes to sophisticated real estate investment transactions. The deals can stand or fall on their own merits instead of having to meet some arbitrary guidelines established by either a governmental agency or some faceless bank bureaucrats. In addition, the lenders, themselves, are usually seasoned business veterans who can often offer advice and identify potential pitfalls in an investor’s deal.

Before wasting time, energy and resources on finding and developing a relationship with a conventional lender, a prudent real estate entrepreneur should investigate the advantages of dealing with like-minded individuals who are more interested in getting the deal done than in staying within the appropriate guidelines. Hard money lenders are the obvious choice for any real estate developer who needs more than just a check.