ground-up construction hard money loans

Everything You Need To Know About Ground-Up Construction Hard Money Loans

If you wish to undertake a ground-up construction project, it can get overwhelming. There are so many things to consider, and ground-up construction hard money loans often play a critical role. However, finding the right ground-up construction hard money loan can be challenging. Most real estate lenders believe ground-up construction loans to be risky. The loan and management officers must scrutinize every little detail of the project before deciding if they can provide you with funding. 

Besides all the paperwork you must muddle through, the construction company and the construction mortgage lender have to have countless discussions. It is the norm for most transactions, but it can be time-consuming, costly, and may add delays to your construction project. Your schedule and plans will get delayed, causing significant concerns for your company and the project. Moreover, you might not meet your project deadlines and incur additional expenses relating to delays, costing you more and hurting your bottom line. However, with the help of ground-up construction hard money loans, you can complete your project within the budget and on time.

The Primary Difference between Hard Money and Traditional Construction Loans

Regardless of the current state of the real estate market, all investors need money to handle their construction projects. Over the past few years, there have been several changes in the real estate market, so real estate developers have to face much more challenges in acquiring funding from a traditional lender. You can have a massive lag in closing your loan on a timely schedule with more paperwork and documentation necessary. However, ground-up construction hard money loans can make a significant difference here. Hard money loans are a perfect alternative for all real estate developers who need funds to start their projects and may not be an ideal candidate for a traditional loan. Such loans are suitable for people who have deadlines to meet or individuals who don’t want to wait for a conventional or government loan.

There are a few things that all developers need to consider when choosing between hard money and traditional loan. If you are having difficulty selecting the right loan, you must hire professional help. Professionals have experience and can help you make an informed decision. Consider the following factors when deciding between a traditional loan and a hard money loan:

When Do You Need The Money?

Acquiring a real estate loan quickly can make a huge difference when you have a chance to get a great deal. In the world of real estate, especially when it comes to ground-up construction projects, time plays a vital role in the overall success of your project. While the approval and funding timelines may vary, ground-up construction hard money loans tend to be quicker than most other lending solutions. Where a traditional lender may take 30 days or more to provide you funding for your project, a hard money lender can give you funds within the week.

What Type Of Loan Structure Do You Prefer?

Your loan structure is also vital when applying for ground-up construction mortgage loans. Most traditional lenders use set terms with little to no room for your specific requests. The loan committee will only consider construction projects that meet these specific requirements. You may have an exception if you have a long track record working with that lender; however, that’s often not the case. You may have a little more flexibility, but nothing is guaranteed. On the other hand, a hard money lender can provide you with flexible loan repayments and collateral release terms. Remember that a private money lender can efficiently structure your terms to benefit both parties. Moreover, they can also meet your repayment schedules with no hassle.

There are several reasons why a builder may not get approval via traditional means. Even if you have a good financial history, a bank may spot something in your application that doesn’t work well. Things like being self-employed or not having the correct paperwork may get you denied quickly. However, a hard money lender will use more than just your company’s financial history when they evaluate your loan application. They will also look at your overall ability to pay back the loan alongside what you contribute to your project. Your qualifications also play an essential role in getting a ground-up construction hard money loan.

Want More Information? Contact Real Estate Funding Solutions Right Away!

The Real Estate Funding Solutions experts can help answer any questions regarding ground-up construction hard money loans. Thanks to our years of training and on-field experience, we know everything that goes into acquiring a loan. Moreover, our team can help you collect, review, and submit all documents for you, ensuring everything goes as planned. With our help and professional guidance, you can easily access hard money construction loans in no time. Call us today at 855-913-8637 to get started with your loan process.

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