Most seasoned investors in
Real Estate Investment in India face situations where they require more money than what the traditional lenders will lend, and here is where real estate investing with hard money loans given by the specialized lenders is useful.
The hard money lenders are actually private money lenders who provide money for a short term. These loans carry a strict repayment schedule. It is given the name as hard money on account of its strict nature. The rates of interest of such loans are also higher than the market rates, and the fees charged upfront, range between 4 to 10 points.
The money lenders of hard money give the investors the access to the capital that is asset based, wherein the loan amount is secured by way of a collateral security. The rate of interest ranges between 14 to 18 percent annually and the term of the loan is normally six to twelve months.
Along with the property as collateral security, the hard money lender requires can require credit reports and well as documented experience in previous deals you have done. The lenders indulge in inspecting the property and making appraisals, before approving the loans.
The lenders of hard money study the intent of the investment on part of the investors, the strategy of exit that is adopted, the information of the property that is provided such as the residential or commercial nature of the property and also check the credit ratio of the concerned borrower. The financial strengths of the borrowers play a vital role in securing the loan.
