Hard Money Lenders in Los Angeles and the Real Estate Market
Posted On March 24, 2021
Los Angeles remains a very attractive market for those who can afford it. Tea California Association of Realtors reports that Los Angeles home prices have risen 6.1 percent this year to date and are projected to show a 6.5 percent increase for all of 2015. Meanwhile, in Los Angeles County , prices have soared 5.4 percent so far this year. These figures include detached and semi-detached single-family homes and duplexes. Century City Real Estate Report says some upscale Los Angeles neighborhoods are past the 2007 peak. This situation creates a wonderful market for hard money lenders as many investors are preparing to buy but are tied by ratings. bad credit and credit histories. Denied borrowers turn to hard money lenders in their area who will release funds based on their collateral.
Here is the Los Angeles real estate data for 2015-2016
The California Association of Realtors projects sales figures of 407,500 single-family homes by the end of 2015. This will be a 6.3 percent increase over the homes sold in 2014. The projections for 2016 are also for a 6.3 percent increase to 433,000 units predicted below. year.
In Los Angeles, some data sources, such as the California Association of Realtors, show that median sales prices for single-family homes and condos soared 8.1 percent to $ 950,000 for the third quarter of 2015; a record for the Los Angeles metropolitan area. The regions include Westside, Downtown, and coastal cities like Malibu, but skip low-priced areas like South LA.
One way to understand real estate price cycles is to look at building permit numbers. If developers are investing in new properties, as has been happening in the general Los Angeles area, it is a good sign that demand and prices are increasing or holding steady. Statistics show a growth of 2.4 percent in construction projects.
Observers worry that Los Angeles may be approaching another housing bubble, but William Yu, an economist at UCLA Anderson School of Business, strongly denied this prediction in a recent UCLA Anderson forecast. Prices have skyrocketed (he said) in a Los Angeles market that is already expensive only due to excessive demand and limited supply. This is not a housing bubble, but an enormously expensive and inaccessible situation in which those who have money invest or would like to invest. In fact, the market primarily targets the very wealthy. Typical reports show that builders and investors are looking to the high-end luxury market where the potential returns far outweigh the returns an investor can make from a mid-priced home. This type of high-end residential development needs investors with the right types of funds. Some people go to banks for their loans. Another approach alternates traditional credit institutions.
And those who don’t have money? Or with bad credit that you can’t get a loan?
This is where hard money lenders come in.
Los Angeles Hard Money Lenders
The Los Angeles money loan directory lists 56 hard money lenders and the list is growing all the time. Experts in the field know that there are many more that are listed elsewhere or are not listed. These (and other) brokers lend their personal funds to residential and commercial borrowers. Hard money lenders ignore the credit history and FICO scores of these borrowers, focusing instead on the value of their collateral. If the borrower defaults, the lender sells his property as a refund.
Many investors are quick to turn to hard money lenders for their quick turnaround (usually less than a week) and for the simple and easy procedure (just a few documents and a handshake). They detest high interest rates (twice those of banks) and low-value loans (sometimes as low as 60% -50%). Many borrowers tend to borrow hard money for the immediate short-term future and then pay off with bank loans or cover the remainder with alternative financing. Hard money loans are expensive, so most borrowers try to use them for the shortest time possible.
The Los Angeles hard money brokerage is diverse and broad. You’ll find lenders dabbling in all kinds of deals and making loans to a variety of investors. Lenders also offer variable amounts and for variable periods of time. Since lenders work independently, after all, it is their own funds that we are talking about, they set their own terms and hours. If you go that route, make sure your lender is certified by the Los Angeles Real Estate Regulatory Board and the National Mortgage Licensing System (NMLS). Also look at their credentials and loan history. And best of all, have an attorney review all agreements before signing.
The conclusion is this …
Los Angeles’ rising prices and tight inventory have driven more investors into the high-end market. Investors have been left unchanged, but there is a larger market for the higher paying population or wealthy foreigners. This type of inventory drives prices higher and is expected to rise further in the coming years, as there are few new construction in the works to meet demand.
For those in Los Angeles who want to take full advantage of this upscale market but lack the funds to do so, hiring a hard money loan broker may be a feasible solution. This type of broker ignores credit history and focuses on the asset. Luxury assets appear to have great potential. If the borrower can show the broker his ability to pay and convince him of the value of his property, the borrower can find an alternative means of securing a place in the Los Angeles luxury market.
The California Association of Realtors predicts that home prices will likely “grow steadily” into late 2015 and into 2016. Many investors in Los Angeles are reaching out to brokers to finance their immediate needs. What do you think of these solutions? Feasible?