As the year 2020 draws to a close, it is a great time to reflect. Of course, none of us saw this pandemic coming or had any clue how it might change our lives. Nonetheless, American entrepreneurs don’t give up. Entrepreneurs stand up after a fall, dust himself/herself off, and get at it again. That is the entrepreneur’s nature.
There is an old saying: “If everything goes to hand in a handbasket, Real Estate is one of those few tangible assets that isn’t going to go away. They don’t make more land,” the saying goes. Many realtors we talked with told us that for them, business in 2020 has been surprisingly good.
Hard Money Supports the American Dream of Real Estate Investors
Along with that, hard money is continuing to support the American dream of many real estate investors. Savvy real estate investors know that with hard money, they can extend the leverage of their resources. Over the past years, we have written many articles that tell the tales of investors who accumulated wealth by initially financing their Real Estate projects with hard money. Some of the stories told of investors who acquired beachfront homes they could never have afforded otherwise. Others yet were inspiring stories of families who managed to create a family business and legacy.
Looking at the Big Picture: Is Hard Money “Good” or “Bad”?
We have observed that some part of the population believes that hard money is somehow bad or hard to deal with. The reason for these notions is that interest rates are somewhat higher than what you would get from a bank. If you can get a bank loan and get it quickly enough, it is always cheaper. But many people give up on the sale and project they had envisioned if they cannot get a loan from a bank or cannot get it fast enough.
Yet, a segment of entrepreneurs knows that the wise use of hard money is smart. It helps them fulfill their dreams. Rather than only focusing on the cost of a hard money loan, there are looking at the whole picture.
- How much money will they make?
- What is their return-on-investment?
- What are the risk factors along the way?
How Does Gard Money Help Realtors Close More Deals and Get More Referrals?
Let’s talk about this from the point of view of realtors. Like with investors, one might think of Realtors falling into two groups. They are Realtors who will only deal with conventional lending. When a potential buyer does not qualify for conventional financing or doesn’t have enough cash to buy the property, it’s over. Their realtors lose the deal.
Yet, there is another group of Realtors who are educated about the smart use of hard money. These Realtors find that they can help many of their clients past the “the bank says ‘no'” or the “the bank is too slow” hurdles. These realtors close more deals. They are also likely to get more referrals from their past clients.
It’s as simple as that. Or is it? There are a couple of other factors.
Hard Money Factors You Need To Know About
- When you use a hard money lender, it better be one who knows their stuff.
- They are reliable, fast, and above all, have the client’s best interests in mind.
- They will use a common-sense hard money lending philosophy. They base their decision to lend or not to lend primarily on how much equity the borrower has.
- They also have creative solutions, for example, using a technique called cross-collateralization. That means equity from one property is used to finance another without selling the property that has equity first.
- Furthermore, it is beneficial to have access to a hard money lender who can deal with many different situations.
- Many hard money lenders work in a narrow niche. Realtors we work with frequently compliment us on being able to handle many different scenarios.
- Work with a lender who will steer you and your client right.
- RanchoTed has a long tradition of offering education around the use of hard money. There is Lunch’ n Learn meetings at Realtor associations, Brown Bag webinars, and even in-office lunch meetings.
- Our effort is all about teaching realtors, investors, and even conventional mortgage brokers when hard money is right and when it is not. It is that kind of integrity that causes the American dream to soar, in good times and challenging ones.
Even a Pandemic Can’t Crush The American Dream
In closing, even a pandemic cannot crush the American dream! We wish you an enjoyable holiday season! Please let us know when we can be of service to you and your clients. We are always happy to answer your questions.