At Abbey Mortgage & Investments, we have nearly a quarter century of experience when it comes to hard money loans in Denver and other Colorado communities. Those are Front Range cities like Greeley, Berthoud, Loveland, Colorado Springs, Boulder, Longmont, Fort Collins, and pretty much everywhere in between!
What Is A Hard Money Loan?
We have a passion for forging partnerships with people in need of hard money loans. But if you are like many of our prospective clients, you might be wondering what all a hard money loan entails, and if it might be right for you. For starters, a hard money loan is characterized by being a loan that is secured by hard assets (collateral) with a supplemental consideration for the “3 C’s” – Character, Capacity, and Cash Flow. Hard assets can take a variety of forms, from property to another development you already are generating revenue from. We also take your character and cash flow into consideration within the internal review process.
But before we get too far ahead of ourselves, let’s get to today’s topic, hard money loan myth busting! Read on if you are trying to separate myth from fact when it comes to something like a hard money real estate loan.
Myth – Private money lenders want me to default
Fact – At Abbey Mortgage & Investments, this couldn’t be further from the truth. We aren’t seeking to take your property or cash flow away from you. If we wanted to get in the real estate game, we would simply go out and buy property so we could flip it. That’s not our role in the market though. We make our livelihood by making money off of money while you can generate income via your property value. This leads us nicely into debunking the next myth…
Myth – Cash Isn’t Required For A Hard Money Loan
Fact – You may have read this on the internet, but not everything on here is to be believed…believe it or not. Cash flow is typically an essential element of any loan that we consider (it’s one of the 3 C’s, after all). There may be situations in which you, the investor, have the opportunity to purchase a piece of property that is significantly lower than its actual value. If that is the case, then this rule may not apply to you, which is nice!
Myth – Hard Money Lending Is A Fallback Option For Those With Lousy Credit
Fact – There are many case studies that we could point to in order to specifically debunk this myth, but logic will suffice for the purposes of this blog. There are many properties out there where the owner is lacking the cash to to rehabilitate the property to make it financially viable for business (think of a restaurant that needs a remodel and a new grill). Most banks won’t go near this type of ask, but not because of bad credit. That might not even factor into the equation. And if you are considering a hard money loan on a similar project, ask yourself how important getting funding in less than a month is to you? As a rule, banks can’t or won’t do that. But we do.
Myth – Exist Strategy Is Irrelevant
Fact – While doing business with a quality private hard money lender like Abbey Mortgage & Investments is a good idea for many people, it doesn’t follow that we will be able to approve everyone who applies categorically. Some helpful tips that will improve your likelihood of approval include being able to prove financial stability and having a viable exit strategy. That means you’ll be able to show us how exactly you plan to pay back the borrowed funds at the end of the loan term. If your exit strategy involves selling your property, get an action plan together. An appropriate action plan would likely incorporate a sales agent, property listing, and that sort of thing. We are happy to speak with you about detailed requirements for your specific hard money loan once we get to that step of the process.
Myth – Hard Money Financing Is For The Desperate Only
Fact – Hand-in-hand with the above myths comes the line that hard money is way too expensive to be realistic. On the contrary, hard money loans don’t typically cost more than bank financing, although that depends on specifics. In reference to the myth outlined above, many people in good financial standing choose to opt for hard money financing, often for a variety of reasons. Those reasons often include the speed of the funding as well as having assets tied up in property rather than spendable cash, to name a few.
Abbey Mortgage & Investments: Your Colorado Source For Hard Money Loans
When the time is now to act, Abbey Mortgage & Investments can move with purpose to make sure your window of opportunity doesn’t close. Hard money financing is a great way to fund construction, turnaround, rehabilitation, or even fix and flip projects. We have a team of experts here at Abbey Mortgage & Investments who are skilled, experienced, and outside-the-box thinkers. We are dedicated to walking with you each step of the process, because time is often of the essence. We balance that with being thorough and leaving no stone unturned. That’s a huge reason why we are one of the elite hard money lenders in the state of Colorado. Reach out to us today, we would love to provide value.