A Booming Business

For most of us it is difficult to ignore the challenges that the real estate world is facing. Everyday we are receiving news that a company or a real estate market is not doing well. Even in France, where I am from people have heard of the U.S. real estate crisis. The "subprime" meltdown highlight a very important point of the real estate world, if there is no capital available for buyers / home owner to borrow then no transaction will be completed. Until late July 2007 when capital was easily available no questions regarding financing were asked, today it is a complete different ball game. If you are involved in a real estate transaction and you want to close it, understand financing has become very important. Here we are going to discuss a specific segment of the industry Equity or Hard Money Lending.

Since mid August everything has changed, there is less and less capital available for buyers / home owners to borrow. As banks and financial institutions are tightening their lending criteria and as subprime lending has disapeared borrowers are turning toward alternative sources of funds. Hard Money lending offers borrowers access to capital based on property value and not based on credit. For a Hard Money lender credit is somewhat irrelevant to the approval of a financing. The loan is protected by the "equity protection" available in the real estate property. Today, Hard Money lending is a nitch industry exploding as credit lending is contracting.