McLaren Group Partners with McLaren Capital
Commercial Lending
At McLaren Group, our mission is to provide our clients with the best possible real estate experience. We strive to exceed expectations and provide exceptional customer service every step of the way. Please reach out to us to get a Loan Terms Sheet for the specific type of loan you are looking for.
Hard Money Loans
What is a Hard Money Loan?
Using Hard Money as a Bridge Loan
Using Hard Money as a Bridge Loan
A hard money loan is a type of short-term, high-interest loan used to finance real estate investments, typically for fix-and-flip projects or property renovations. Hard money lenders focus on the value of the property rather than the borrower's creditworthiness, and often require a significant down payment and collateral. These loans have higher interest rates and fees compared to traditional loans, but offer faster approval and funding times, making them ideal for investors who need quick access to capital. Hard money loans usually have a term of 6-24 months, allowing borrowers to quickly renovate and sell or refinance the property.
Using Hard Money as a Bridge Loan
Using Hard Money as a Bridge Loan
Using Hard Money as a Bridge Loan
Hard money can be used as a bridge loan to provide temporary financing for real estate investors until they can secure permanent financing or sell the property. Here's how it works:
1. An investor finds a property they want to purchase or refinance, but need quick access to capital to close the deal.
2. They apply for a hard money loan, which is approved based on the property's value rather than their creditworthiness.
3. The hard money lender provides the funds for the purchase or refinance, typically with a short term (6-24 months) and high interest rate.
4. The investor uses the hard money loan as a "bridge" to secure permanent financing, such as a conventional mortgage or long-term loan.
5. Once the permanent financing is in place, the investor pays off the hard money loan, avoiding the high interest rates and fees associated with hard money lending.
Hard money bridge loans are useful when:
- An investor needs to close a deal quickly and can't wait for traditional financing.
- A property needs renovations before permanent financing can be secured.
- An investor wants to secure a property before selling it their existing property and needs temporary financing to hold the property they want to buy until the sale of their existing property.
By using hard money as a bridge loan, investors can access quick capital, secure a property, and then transition to more affordable, long-term financing.
Joint Venture Agreements
Using Hard Money as a Bridge Loan
Joint Venture Agreements
An investor may benefit from a joint venture with an experienced agent and contractor because the agent can provide valuable market knowledge and access to off-market deals, while the contractor can offer expertise in renovation and construction, allowing the investor to tap into their network and resources. This partnership can help the investor make more informed decisions, reduce risks, and increase potential returns on investment. Additionally, the agent and contractor can share in the profits, aligning their interests with the investor's and ensuring a collaborative and motivated team. This joint venture can be especially beneficial for new investors or those looking to scale their real estate business.