Real estate investment is a capital hungry endeavor from the initial property purchase through to renovations and repairs. Maintaining adequate capital reserves is of the utmost importance, but for some investors finding the right source for funding is a challenge. Traditional banks and other lenders have strict guidelines and focus on an individual's credit history as a main criteria for credit worthiness. They are also bound by the rules set forth by the Dodd-Frank Act of 2010 which was enacted in response to the financial and housing crisis. What's more, the loan application and approval process can be slow, which doesn't always work well for investors.

One way to overcome these issues is with a hard money loan from a private lender. Following are five things that make a person a good candidate for a hard money loan.

• Blemished Credit History - In order to qualify for a traditional bank loan, a stellar credit history is a requirement. Even a small blemish can result in being denied. Hard money lenders, on the other hand, aren't as concerned with the individual's credit history as they are with the collateral. If a borrower can show that the investment is worth making, a hard money lender is more likely to oblige even if the credit history is less than perfect.

• Funding Is Needed Quickly - Banks and other traditional lenders require borrowers to go through an extensive application process before granting a loan. Weeks, or even months can pass before a decision is made, leaving an investor in limbo. Investors who can't wait often turn to hard money lenders since they're able to approve and fund much faster since they have less-strict lending requirements.

• Short-Term Investing - Investors who specialize in fix-and-flip properties generally like to purchase, renovate, and sell within 12 months or so. Their objective is to get in, do the work, and exit with a hefty profit in hand. Hard money loans are ideal for these short-term investors because they can quickly finance their purchase and make the necessary repairs and renovations to bring the property to market.

• Poor Property Condition - Conventional mortgage lenders shy away from properties that are in poor condition. Buy-and-hold investors, however, often seek out these types of properties since they are often undervalued. Hard money lenders understand that houses in poor condition are actually good investments as well. Borrowers often acquire the property, make repairs, and then refinance at a lower rate when work is complete.

• Fast Portfolio Growth - Investors who are seeking to grow their rental property portfolio may not always have the capital on hand to take advantage of opportunities. Very often, a hard money loan is used to make the additional property purchases. As mentioned previously, the process is much faster than a traditional lender, and the loan processing guidelines are less stringent.

If you are a real estate investor who falls in one of the categories above and you're having a hard time finding conventional funding that suits your needs, contact us at Trust Deed Capital. We are a hard money lender who understands the importance of getting the funding you need, when you need it.