What Are the Pros & Cons of Hard Money Lending In California
                     What Are the 
Pros & Cons of 
Hard Money 
Lending In 
California
Investing in real estate can be a profitable way of 
building wealth, and it is also a wonderful way to 
diversify your portfolio. Real estate investment trusts & 
real estate crowdfunding cann allow you invest 
passively, but some investors may prefer to own 
property directly.
If you aren’t comfortable spending a large sum upfront 
to buy real estate, hard money lending in California 
may be your best option.
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How hard money loans work?
Hard money loans are short-term lending instruments that real estate 
investors can utilize to fund an investment project. This sort of financing is 
usually a good option for real estate developers or house flippers whose 
objective is to revamp or build a property, and eventually sell it for a profit. 
Hard money loans are given by private lenders instead of mainstream banks.
Unlike conventional bank loans, the capability to get hard money loan is not 
decided by the creditworthiness of the borrower. Instead, 
hard money lenders California use the property’s value to determine 
whether to provide the financing. Especially, lenders emphasize on the “after 
repair value”, which is an estimation of what the property will be worth as 
soon as the restoration or development stage is finished.
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However, there are 2 major downsides of hard 
money lending:
●Cost – No doubt hard money loans are expedient, but investors have to pay 
a price for this sort of borrowing. The rate can be up to ten percentage points 
higher than a regular loan.
●Shorter repayment period – The intention of hard money financing is to let 
an investor get a property ready to sell on the market as fast as feasible. 
Thus, these loans have much shorter repayment terms than conventional 
mortgage loans.
The pros of hard money lending in California:
Put the above mentioned 2 main drawbacks aside, there are many good 
reasons to consider availing a hard money loan.
●Convenience – with a hard money loan, it is feasible to get cash inside a few 
weeks. That is critical if you are funding a large-scale development project and 
cannot afford aberrations from the deadline to completion.
●Flexible terms – As hard money loans are provided by private lenders, it is 
feasible for investors to have more room for negotiation of the loan terms.
●Collateral – With a hard money financing, the property itself generally 
caters as security for the loan. But again, lenders may give investors a bit of 
freedom here. For instance, some lenders, may let you secure the loan 
employing personal assets such as residential property you own.
For complete Hard Money Lending help in California, do get in touch with 
All California Lending.