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Articles on
Hard Money Financing

Residential Hard Money Loans South Carolina

South Carolina Residential hard money loans are those offered by private lenders like hedge funds, wealthy private individuals and small community based investment companies. These hard money loans are based on the value of a collateralized asset pledge by the borrower, compared to conventional loans that use borrower credit history, tax returns and income statements as their criteria.

South Carolina Residential hard money loans are usually acquired from acquisitions, refinancing, foreclosures and bankrupt individuals looking to rebuild their credit history. The interest rates on these loans are high, but it is quite cheaper & worthwhile considering the stern terms and regulations, time frames and the closing costs of a conventional loan.

Usually South Carolina hard money lenders offer interest rates 6%-8% higher than conventional bank loans. People come under the impression that these loans are hard to payback however these hard cash loans are beneficial for borrowers who cannot find additional lending for renovations of residential property before selling or putting it up for rent.

South Carolina Hard money lenders consider income producing properties such as apartments, retail properties, industrial, office building, hotel, motels, medical facilities and restaurants. There are though other non-income properties that they consider investing into like land acquisitions, development projects, construction sites, foreclosures and bankrupt properties.

Most private investors look for a safe and guaranteed investment, with an above average return they could get from banks. South Carolina Residential hard money loans are usually secured by 30-50 % equity from the borrower

Advantages of South Carolina Hard Money Loans
South Carolina Residential hard money lenders never consider impractical aspects like credit scores as a factor when assessing borrowers. If hard cash lenders do require a credit report it’s most likely they want confirmation that the borrower is not bankrupt, doesn’t have open judgments against them or in foreclosure. These factors may not even budge the lenders decision o underwrite the loan, but it may force them to raise the interest rate and keep close monitoring.

When buying a property at a discount of availing a short sale, borrowers can finance 100% of the cost using hard money loans. For instance buying a $100,000 property for $50,000, the borrower can procure the entire funding from a South Carolina hard money lender making a loan at a 50% loan-to-value. This is something a conventional lender will never do.

Usually private lenders check the future income generating ability of a property, they are however more concerned about the current value of the property. The value of the property at loan origination is a very important number for the investor since this is the value they will consider for collateral if the loan is not serviced and things go the other way. Private lenders rarely approve vacant properties with no rental income as prospect investments; however these types of properties are favorite targets for private lenders.

The speed at which private hard cash loans are closed is maybe their best advantage. Speed of closing the loan is a huge advantage for many real estate investors, especially those buying properties in auctions, short sales and discounts. When carried out properly a hard cash loan process can be closed in 24 hours, usually it takes between 14 and 30 working days. Even the longest South Carolina hard money lender timelines are less than a basic conventional loan.

South Carolina Hard Money Saves the Day!
The credit crunch was severe and hurt the common man in all aspects. Over the past 3 years we saw lay-offs, corporations downsizing their operations, banks filing bankruptcy and most crucial of all people getting evicted from mortgaged properties. Conventional South Carolina lending institutions like banks, insurance companies and investment houses have if not cut-off reduced their lending activity close to nothing. Even the most qualified and capable investors and developers have been refused any funding.
The collateralized debt market has dried up or simply died, with few investors looking to buy mortgage back security notes. South Carolina Lenders are finding it difficult to fund mortgages that payback, hence no buyers, no sale. Mortgage loans outstanding measure in the range of hundreds of billions with corresponding foreclosures. Borrowers who would have qualified a year or two back are now being actively refused any funding. With banks caught up in the liquidity crunch and still suffering its effects are reluctant to fund even the most qualified borrowers.

South Carolina Hard Money Lending to the Rescue
In the current crises South Carolina private hard money lenders are saving the day. Hard Money Lenders funded by wealthy individuals, hedge funds or investment companies are looking to fund real estate investors and borrowers to improve their personal portfolios. These lenders are those who were either unaffected by the credit crises or ones who earned big before the crises and are looking to invest in lucrative sources now.
Compared to South Carolina conventional loans it’s much easier to close private hard money loans in a matter of days. Since there are no loan committees or complicated analysis and calculations to deal with, these investors are easy to convince and close private loans.

South Carolina Hard Money Lending is equity based, loans requests are not dependant on the credit history of borrowers. It is essential the property has significant equity in it. Most Hard Money Lenders will not fund more than 65% of the property price or in case of refinances the market value of a South Carolina commercial property. Borrowers will require 30-50% or more in cash, since Hard Money Lenders require a higher down payment. Hard cash lenders have less documentation requirements, but borrowers should be prepared to backup any claims with proof. Also hard cash lenders prefer income generating properties.

With financial institutions suffering and bleeding, although they have been handed a meaty bailout from the US Government, private lenders are the saviors of the commercial real estate sector. South Carolina Private lenders are ready to invest in income deriving commercial properties and feasible projects under development. Borrowers should search for these investors since they are the only bailout strategy that they have.


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