If you have been working in the construction industry, you may already understand that private money lenders tend to have a longstanding history with professional developers. Since banks look at new construction loans carrying too much risk, private lenders are always interested in ground-up construction loans. After the recession, everyone offering personal money construction loans has started to exercise a little caution. Nevertheless, they remain a viable option for you.
What Are Hard Money New Construction Loans?
A hard money construction loan is finance provided to people planning to build a new commercial or residential building project. The total amount of money you are allowed to borrow tends to depend on several factors, such as the total value your project will have after completion, the purpose of your construction, and regulations in your state. Generally, you can borrow up to fifty percent of refinancing or land acquisition and a hundred percent of the vertical costs. If your construction project seems to be too ambitious and the investor agrees that it will provide returns, you can end up securing even higher land acquisition value.
When Should You Get A Private Ground-Up Construction Loan?
Let us imagine you are planning a construction project. You have successfully located a piece of land and know you may have some competition for the property. Since the nature of your project is time-sensitive, it will call for a quick close and looking for a ground-up construction loan. Depending on the complete information you can provide and at what speed you deliver it, you can receive the required money within one to three weeks. You should also consider getting hard money ground-up construction loans if you do not have a credit score that is up to the mark for your project.
Most professional brokers can work within a score of 600 at least. Under some conditions, you can even get the opportunity to borrow money if you are a foreign national. If the banks feel like you seem to be financially risky, a private money lender may still choose to overlook a few risk factors based on the assets you promise to deliver. Always remember that a private money lender may view you as a worthy investment and not a financial risk after they receive a report from an independent surveyor who verifies your predicted financial outcome for your construction project.
You should also remember that these loans tend to work well if you plan to complete the construction project and sell it within the first 12 to 18 months. Since all short-term loans come with much higher interest rates, they make perfect business sense to all professionals regardless of the reduced time to earn gains via the interest. On the other hand, banks tend to work with much lower rates, so quick turnaround times that make loans less profitable are of little interest.
How to Access Ground-Up Construction Loans?
Getting a ground-up construction loan often requires you to be thorough with your research. So, gather all information concerning your construction project’s final cost and plan. It is important because your potential private lender may need all the proof they can get to convince them you are worth the investment. We suggest you compile all the details about your construction project location, approximate turnaround times, the contractors, and profit predictions.
If you wish to increase the number of people ready to finance your ground-up construction loan, you need to contact a professional lender right away. You can even consider hiring a broker since they will have a lot of knowledge regarding private construction loans than most other people. However, remember that you will have to pay some fee for their service. If you are looking for a ground-up construction loan lender in New Jersey, you must contact the Real Estate Funding Solutions team. We will not disappoint you.
Get In Touch With Real Estate Funding Solutions Right Away!
Do you wish to get a new construction loan but don’t want to wait for the bank’s approval? If yes, then Real Estate Funding Solutions can help! At Real Estate Funding Solutions, our professionals have helped many clients with their ground-up construction projects. We have a team of knowledgeable construction loan lenders who work day and night to make the process as effortless as possible for you.
When you work with us, you will get to have peace of mind, knowing that you have a reputable and established mortgage partner by your side. All you have to do is finalize a construction plan that suits your objectives the best, and we will help you cover its costs. Click here to get in touch with our team and start your construction project today! So, what are you waiting for? Get started on your ground-up construction project right away.