Building a real estate investor business can be a great way to build your net worth and give yourself another income stream from your rentals in San Diego, CA. However, when you are first starting out in the real estate business and building a real estate portfolio in San Diego, CA, you may be struggling to find financing for your properties. After all, traditional lenders can require a significant down payment or require you to make a variety of repairs before they will finance the property.
This challenge can make breaking into the real estate business complicated, but there are ways to get the financing that you need without going through the traditional financing system. Here are a few of the real estate investor services offered by private or hard money lenders in San Diego, CA.
Private Money Lenders Offer Quick Turnaround
Traditional financing options mean going through a long mortgage application process, one that may take up to 60 days or more. Then there is the closing process that adds more time to the process. Growing your real estate investment portfolio can take longer as a result.
Private money lenders in San Diego, CA, can offer loans that are equity based, focused on what equity is available in the property or will be available once you have made improvements to the property. If you find a property, then you can submit the information and get a loan proposal within 30 minutes without social security numbers, employment history, and more.
That quick turnaround continues into the application process, which is geared toward getting you an answer fast and then getting the loan closed within 7 days.
Traditional Factors Involved in Qualifying for Financing
Another reality is that traditional financing is focused on understanding your employment history, your credit history, and many other personal details of your financial life. You have to go through a rigorous process to prove out your income and debt, before you can even qualify for a loan.
As already mentioned, private money lenders are not focused on those issues, because they are more focused on the property that will be securing the loan. Therefore, your previous credit issues are not going to be a deciding factor in determining if you qualify for financing.
Loan terms with hard money lenders in San Diego, CA, are also more flexible, simply because traditional lenders have more requirements to meet under the Dodd-Frank Act. Investors who need a fast turnaround to make their purchase may find traditional lending could put them at risk of losing the property.
Building a Relationship to Build a Portfolio
Real estate portfolios involve making multiple purchases of rental properties or flip properties. Depending on fast you want to grow your business, you are likely going to need access to financing that can be tapped multiple times. Since hard money lenders in San Diego, CA, are looking at the equity in the property, you can build a relationship that allows you to finance multiple properties within a specific period.
Another advantage of this relationship is that you have the ability to purchase a property, improve it, and then refinance it with a private money lender. While some only offer short-term lending options that need to be repaid within a specific time frame, others will create loan terms that allow you to refinance or purchase with a long-term hold in mind.
No matter how long you want to hold your properties, a hard money lender is likely to offer you terms that fit into the growth cycle of your real estate portfolio.
A Financing Option for a Flip
Another way to grow your real estate business is by purchasing properties, making improvements that increase the equity of the property, and then selling it for a profit. However, traditional financing options often don’t fit into the world of flipping homes, simply because most flippers only hold these properties for a short period of time.
Private money lenders in San Diego, CA, can be the right option for flippers, because they provide a way to finance the initial purchase and improvements to the property. Once the property is sold, the loan is repaid, and you can move on to the next one. Working with a private money lender, you can build a relationship that will allow you to continue flipping houses without being delayed by the traditional financing application process.
No matter what type of real estate portfolio that you want to build, working with a private money lender in San Diego, CA, can be a good option to help you reach that goal. Contact our experienced team today to learn more about the financing options that we offer.