Loan Programs | Soft Money Lending for Real Estate Investors
Soft Money Lending: A Long-Term Financing Solution for Real Estate Investors
Soft money lending is a new type of long-term loan program that is fastly becoming the leading solution used by real estate investors for their investment properties.
A soft money loan incorporates many of the benefits of hard money lending, however, instead of a program structured around the property, it is based on the borrower’s credit score, investing history, and liquid assets. This is a program that reflects the needs of investors who require a lot of cash and significant financing in the long term.
While it requires more documentation than hard money lending, it is easier to apply for a soft money loan and get approval for than a bank mortgage or traditional lending institutions. These types of loan programs are a quick, affordable, and secure form of private money lending that benefits both the borrower and the lender.
Soft money lending is applicable for a majority of investment property types, such as single-family, multi-family, commercial, mixed-use, office, retail, etc, as it can fund various projects ranging from reconstruction, rehab, tenancy, and equity growth.
This loan program is a growing form of private money lending that is opening the doors and reaching new heights as it lowers the barrier to entry in real estate investment by making it more accessible and reasonable for everyone involved.
Loan Terms for Soft Money Loans
Soft money loans are a popular financing option for real estate investors looking to invest in multifamily properties. At Kings of Capital, we offer soft money loans as an alternative capital source for investors.
Our experienced loan officers can help you determine if a soft money loan is the right financing option for your investment goals. Apply now with your loan scenario, and a member of our loan officer team will get back to you shortly.
SOFT MONEY LOANS OVERVIEW
• Blanket Loan Options Available
• Single-family, condos, townhomes, multi-family, Commercial
• $75K – $5M
• Up to 80% LTV
• 30-Year Fixed-Rate Loans
• 5/1, 7/1, 10/1 ARM Loans
• No W-2s required
• Rates 4.99% - 9.9%*
• Purchase, Refinance, or Cash Out
Benefits of Soft Money Loans for Real Estate Investors
There are many benefits to soft money lending that make it so enticing for real estate investors. Some of the biggest benefits include low-interest rates, lower costs, and longer terms. With these types of benefits, investing in properties can feel quite accessible. Through proper financing, borrowers can reach great lengths in their investment strategy.
Unlike a bank, private money lenders can provide the much-needed guidance to real estate investors when choosing the right loan program for their purchase.
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Why Should Real Estate Investors Choose Soft Money Loans?
Soft money loans are accessible to anyone interested in real estate investing, but they have become particularly popular with first-time investors due to their flexible structure. New investors often lack a clear plan for their investment strategy or may not know where to start in growing their equity through real estate.
With a reasonable loan scenario, first-time buyers or borrowers can secure a soft money loan with interest rates as low as 4.375% and an LTV of up to 85%. Soft money loans can serve as an excellent starting point for getting into real estate investment, providing a longer period of time to learn the market.
One of the advantages of soft money loans is the ability to borrow a significant amount of money initially, with lower costs and interest rates. Depending on the lender, borrowers can access loans that exceed 70% of their LTV ratio while still benefiting from lower interest rates and longer loan periods, allowing lenders to maintain a reliable and secure debt program.
Private Lenders and Soft Money Loans: How They Work Together
For private lenders, soft money loans are a relatively newer loan program. It has a lot of potential within the market, but it mainly serves as an alternative to hard money loans and conventional loans.
Private lenders utilize soft money loans with real estate investors who need a little bit more help and guidance - due to their employment history or current income. Many self-employed borrowers choose soft money loans as they require no income verification and are more flexible.
While the approval process for soft money lending is still very fast and basic in relation to a standard bank mortgage, soft money loans require more documentation than hard money loans, such as a look at one’s credit score and history. The reason for looking at one’s credit score is to evaluate whether one would be reliable in paying off their debt and whether their reliability matches with their investment strategy.
Typically, a good credit score for approval is 650 or higher. Either way, lenders require more information than with hard money lending as reliability and security is essential to their operations. Additionally, this allows them to provide borrowers with their funds on a much more suitable timescale and accurate financial plan. Overall, lenders work with soft money loans as they can help sustain and grow a potentially rewarding real estate investment project for the borrower.
Get Started Today: Apply for a Soft Money Loan with Kings of Capital
Kings of Capital is a trusted private money lender offering short-term mortgage loans to real estate investors nationwide, specializing in multifamily purchases and rehab projects.
We recognize the significance of partnering with a lender who comprehends your local market. Our private money loans are designed to assist with investment property purchases, refinancing, equity cash-outs, rehabs, and new constructions.
Ready to Take the Next Step? Contact Us Today.
Stay ahead of the competition in the real estate market with Kings of Capital. Our private money lending solutions make it fast and easy to secure financing for your next multifamily property purchase or rehab project.
To speak with a multi-family bridge loan expert and receive a free, no-obligation rate quote, call us at 267-630-2875
today.