Hard Money Borrowers Turn to Real Estate Crowdfunding
Following the credit crisis of 2008, real estate buyers increasingly rely upon hard money lenders in Texas and elsewhere fisfto fund their acquisitions. The reason why is simple: Real estate investors were tired of being turned down for loans by banks despite perfect payment histories and proven business plans. By contrast, hard money lenders (also known as private money lenders) offered shorter terms and far more straightforward underwriting guidelines than banks. Hard money lenders also charge borrowers higher interest rates and origination fees than banks, however. The market became ripe for an alternative.
Enter real estate crowdfunding. Crowdfunded real estate investments emerged in 2013 as a way for real estate borrowers and sponsors to raise capital from accredited investors located across the country. Real estate buyers quickly flocked to this new alternative as Zeus CrowdFunding and other real estate crowdfunding sites popped up. Today, real estate crowdfunding offers many advantages over hard money lenders.
What are those advantages, exactly? There are several. Much of the appeal of real estate crowdfunding vs. hard money lending comes down to three value propositions:
1. Consistency and Reliability
Though many real estate buyers are supremely skilled and experienced, they often don’t have the capital necessary to scale their business the way they’d prefer. Unfortunately, most hard money lenders are in the same boat: Their funds are limited, at least compared to banks. There’s no guarantee they’ll have the cash available to fund your next project.
Real estate crowdfunding, on the other hand, can provide borrowers with access to what’s essentially an unlimited amount of capital from many different investors. Qualified borrowers are never turned away from Zeus CrowdFunding, and our platform never runs out of money. Better yet, Zeus CrowdFunding is available day and night online. Our borrowers can always rely on us for consistent lending.
2. Low, Transparent Costs
Hard money lenders are often infamous amongst borrowers for their opaque or even shady lending style. More than a few borrowers have been gouged by hard money lenders’ hidden fees. Real estate crowdfunding platforms like Zeus CrowdFunding offer far more transparency. We offer borrowers as much information about their loans up front as possible, and there are no pre-payment penalties or other nasty surprises.
Additionally, Zeus CrowdFunding offers industry-low interest rates. Borrowers pay less to borrow from Zeus CrowdFunding than to borrow from hard money lenders, every time. That means a real estate borrower can keep more of the profits when the property is sold.
One of the major advantages of hard money lenders over banks is that they’re able to originate a loan much faster than traditional, institutional lenders. Well, Zeus CrowdFunding is the fastest real estate crowdfunding site in America. We take pride in the fact that we can close in as little as four days, rather than four weeks. As experienced real estate buyers know, speed is extremely important in the housing market and can mean the difference between breaking even and turning a profit. That’s why Zeus CrowdFunding always empowers our borrowers to move fast on the best deals.
Would you like to know more about how Zeus CrowdFunding can improve on your experience with hard money lenders in Houston, Dallas, Austin, or other markets in Texas and across the U.S.? Call our lending experts anytime at 1-800-ASK-ZEUS. We work with every borrower to create a custom lending solution tailored to his or her unique needs and circumstances.