The future of california hard money loans

We have been asked the other day, “Where will California hard money loan industry stand in next couple of years?” Really thought about over delving into what does the future look like in the California hard money real estate loan business. But it seems like I am just trying to get hard money deals closed and get keep all parties in the transactions happy. However this question forced me to ask myself a few questions and I came up with a following answers:

What will California real estate in general look like the next few years?

At least for Southern California real estate, right now there is a shortage of housing inventory. It look likes we are back to the days of 2005 where a reasonable priced home was getting multiple offers. In California hard money real estate loan business, if you are going for getting deals done when there is hardly any inventory, you think our industry and the lenders business would increase when there is more inventory on the market. As far as home prices are concerned, Southern California had a year over year overall increase. The amount of the increase could differ from county to county but San Diego County has increased by 11%. This makes loans safer for the past couple of years somewhat.

What about the interest rates?

This question is somehow obvious that interest rates for home mortgage loans are low. That is good news for real estate investors. Seeing this, homebuilders are now building new homes and some other investors are lending hard money.

Interest rates tend to go up, now the question is when?

Well it seems that Bernake, Chairman FED has recently that he has plans to sustain rates for next couple of years. It does not mean that it is rock solid guarantee that interest rates are going to remain low. For example if the dollar crashes or China stops buying our high debts, someone would step in and will raise interest rates to make the dollar more valuable and profitable to the foreign investors.

Will banks soften their tough conditions and revert back to stated income loans?

Well we have no idea for a bank (we don’t work for the bank) but the stated income loans, also known as liar loans have come a crushingly halt. We don’t expect they will return. So now you actually have to “have a good credit” and have to show tax returns, that’s some nerve banks have. rnMost of our clients are fix and flippers type. They want answer as quickly as 24 hrs or may be less! With multiple offers on the board, most of the agents cautious (or you should say alert) of taking an offer from somebody who is using conventional financing. For rehabbers who are in need of paying cash, hard money lenders are there for them.rnBesides fix and flippers, there is a refinance market with hard money loans. These properties/homes should be a non owner occupied. Around 30% of homes in United States are free and cleared. California Hard Money Loans is a best way to grab some quick cash to fix up property or even by more real estate.