Why Hard Money Is the Next Best Thing to All Cash

Why Hard Money Is the Next Best Thing to All Cash

With the real estate market as competitive as it is these days, buyers need every advantage to get the deals they want. It is as true for investors as anyone else. The best way to get a leg up in a hot market is to offer all cash. But if you do not have enough cash lying around, hard money is the next best thing.

Hard money is still considered a loan. Therefore, it wouldn’t be appropriate to make an all-cash offer while still planning to utilize hard cash. Such an offer would be a bad faith offer. But making an offer with hard money as your funding source can still be just as effective at winning the day.

Why Sellers Like Cash

Cash offers are not always advantageous in a buyer’s market. Why? Because buyers hold all the cards. But in a seller’s market, it is the other way around. Sellers tend to appreciate cash because deals get done faster. They do not have to accept an offer and hope that the buyer’s financing goes through. In essence, cash offers give sellers more leverage to make a competitive deal.

When it comes to investing in real estate, a genuine deal doesn’t last long. If a piece of property is worth investing in, there are generally multiple suitors looking to get their hands on it. So it’s not unusual for the winner to be the one who comes up with funding the fastest. That takes us back to the all-cash offer.

Hard Money as Fast Money

Hard money is the funding option of choice for real estate investors for the simple fact that it is fast. Lenders like Actium Partners do not need weeks or months to go through a mountain of paperwork, look under every stone, and do whatever else traditional lenders do. Hard money lenders typically need just a few days to get things done.

We have been known to fund loans in 24 hours – when emergency circumstances dictate. That is certainly not the norm, but it is possible. Hard money is the next best thing to cash because it’s fast. It is fast enough that it could mean the difference between closing a deal and letting it slip away.

Good Relationships Are Key

Hard money lending is like anything else in that you can do certain things to maximize its potential. Among those things, we stress developing good relationships with your lenders. Good relationships make getting deals done easier. Good relationships open the door to future projects as lender and borrower build trust.

What does this have to do with all-cash sales? Everything. If you, as an investor, take the time to develop a strong relationship with a hard money lender over several years, you will have confidence to make strong offers on even the toughest properties. Why? Because you know your lender will come through.

A strong enough relationship with your lender could be key to winning more deals – even competing against cash buyers. With a reputable hard money lender in your corner, you will be able to aggressively go after those properties you want because you know you and your lender can get it done.

Here at Actium Partners, we have been helping real estate investors for years. Real estate has been one of our passions since our doors first opened. And we’ve learned that hard money is the next best thing to cash because it helps investors get deals done. If you would like to know more about how we can help you secure your future real estate deals, do not hesitate to get in touch.