Hard Money Explained.
Hard money is a form of real estate financing for non-owner-occupied properties, typically based on the After Repair Value of the property. Hard money loans are a short-term, fast funding option that lowers an investor's cash out of pocket.
Hard money allows investors to leverage their available cash to purchase more real estate in less time.
How is Hard Money different?
witH so many different financing options, it can be hard to tell the difference. Here are a few ways we are distinct from traditional lenders.
Quick Approval
Park Place Funding requires way less financial information compared to traditional lenders. After you submit an application and proof of funds, we can approve you within 24 hours.
Fast Closing
Traditional lenders close in 30 - 45 days, we do it in under 7.
Loan to Value
Our loans provide funding for the purchase and rehab of a property, lowering the amount of cash an investor has tied up in each deal at one time. A traditional loan typically covers 70%-80% of the purchase price, lowering your flexibility.
Interest Rates
An investor will receive more funding than the property is currently worth to cover the majority of the purchase price and repairs, therefore it is necessary for us to have higher interest rates.
Project Funding Comparison
This example is based on a purchase price of $200,000, repairs of $80,000 and ARV of $400,000.
Traditional Lending Structure
Park Place Lending Structure
The traditional lender chart represents the investors initial investment of 25% purchase price plus the $80,000 dollar repair. Park Place chart shows 75% Park Place loan based on ARV, investor cost is is purely interest.