One of the things we are quite proud of here at Actium Partners is that we help our clients reach their financial goals via hard money and bridge loans. Larger goals are made possible by meeting immediate financial needs now. That is how we look at it. We encourage you to consider something similar. Try looking at hard money loans and bridge loans in light of your larger financial goals.
A Series of Small Steps
We assume you are familiar with the idea of achieving larger goals through a series of small steps. You break your larger goals down into smaller goals that are both reasonable and doable. As you reach each one, you get closer to reaching the larger goal.
We look at hard money and bridge loans in much the same way. They are not an end unto themselves. Rather, they are a means to an end. A series of individualized bridge and hard money loans obtained over many years of investing help a real estate investor achieve their goal of building a robust and profitable portfolio.
Important Things to Consider
Looking at hard money and bridge loans in light of your larger financial goals is really about assessing your short-term funding needs and how meeting them will impact your future. That being the case, there are multiple things to consider with hard money:
1. Higher Down Payments
Hard money loans almost always come with higher down payments. There are reasons for this, but they are not important to this discussion. What is most important is understanding that you will be putting more of your own cash into the project. Will doing so impact your ability to invest elsewhere?
2. Total Cost of Borrowing
Next, consider the total cost of borrowing. Everything you pay to obtain and deploy a hard money loan goes into the total cost. So you are looking at interest, closing costs, and any associated fees. Does the total cost of borrowing on a particular loan fit with your plan for achieving future goals?
3. Much Shorter Terms
Among the many characteristics that typify hard money loans are shorter terms. How short? Terms of 6-24 months are about average. Very few hard money lenders will go beyond 36 months.
How do such short terms impact your future financial goals? Short-term terms can be challenging, especially when hard money loans are structured as interest-only loans. This is where a strong exit plan comes in. An exit plan that does not tie up too much of your cash will allow you to keep pursuing your investment strategy as you reach for those long-term goals.
Hard Money Loans Are A Good But Non-Exclusive Option
Hard money and bridge loans are good options for obtaining investment properties, expanding a small business, and other needs. But they are not the only option. You could look into a variety of additional sources of funding for immediate financial needs. We cannot say whether those other options are good or bad.
The one thing we do know is that you have financial goals. You have both short- and long-term goals that you are working extremely hard to achieve. If we can help you along your journey with hard money or bridge loans, rest assured that we are more than happy to do so.
Take a good look at hard money and bridge loans in light of your larger financial goals. If they are a good fit, reach out to Actium Partners so we can talk. If they aren’t a good fit, no worries. You have other choices to work with.
