As our country navigates this health crisis, New Funding Resources is operating normally and is implementing measures to prevent any potential disruption to you, our valued clients. We continue to service our loans and monitor construction projects as normal.
Hard Money Lender – Hard Money Loans – Blog
The average interest rates on a hard money loan vary from private lender to private lender but generally are between 9% and 14% annually. If it sounds high for you, keep one important thing in mind: hard money lenders fund the type of loans that conventional lenders (such as your bank or credit union) will not touch with a ten-foot pole, no matter how much you are willing to pay them. The truth is that the average interest rate on a hard money loan reflects the high risk that a private lender takes by financing the transaction.
As I write this blog, a new year has started. January is the time to reflect on the past and what we accomplished during the last twelve months. It’s also the time to start planning for the future. 2020 is bound to be an eventful year. A lot of things are up in the air. Congress is impeaching the President. We’re in trade wars with China and others. The Presidential election is upon us and, whatever side you’re on, you must agree that it’s not going to be a smooth and orderly process. We can’t predict the future, but based on my recent conversations with our clients, many are looking at 2020 with an increased sense of trepidation. They are worried about the impact of the upcoming Presidential Elections on the economy and the real estate market in particular.
In 2018 and 2019, we saw an increased number of transactions where our hard money loans were used to rehab and keep a home as a rental – as opposed to selling it right after the renovation is completed. Yes, we are talking about good ol’ buy-and-hold versus fix-and-flip. In 2020, I expect this trend to continue. If you’ve been previously focusing solely on flipping properties, now it’s time to consider the benefit of long-term investing.
In our previous blog, we’ve discussed the need for the new out-of-the-box thinking when it comes to rehabbing properties for profit in 2020. Specifically, we talked about how to add significant value and increase the price of the property by expanding its size. However, not every property profitably lends itself to such expansion. Also, not all real estate investors can carry out such renovation successfully. Here are several factors to consider when selecting the right property to expand and a few questions to ask yourself when deciding whether you’re ready to tackle such a project.
If you’re ready to rehab homes for profit in 2020, there is definitely good news. 2019 was an active and profitable year for our borrowers. As we sail into the new year, the fundamentals for another successful year in real estate remain unchanged. As we discussed in our previous blog, we’re fortunate to be living and investing in one of the most stable real estate markets in the nation.