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For investors looking for financing projects abroad, international hard money lenders can be a valuable option. Traditionally, hard money is provided by private money investors who expect to earn a superior return on their capital compared to other sources of investment. They lend money in scenarios that are usually overlooked or frowned upon by the traditional sources. In their pursuit for high returns on their capital, hard money investors are even willing to finance international projects, provided there is collateral that offers a safety net for their loan finance.

International Hard Money Lending for Real Estate

Hard money as the name indicates makes loans on hard assets. Real estate is the most preferred form of collateral for most of the international hard money lenders. Both residential and commercial real estate of all forms and types can be used for securing a hard money loan. Due to the risky nature of their lending activity, most of the international hard money lenders seek substantial equity cushion for the financing they provide. They usually will not lend beyond 55% – 70% of the property or project value.

Most of the hard money loans they make fall in one of the following groups. They finance acquisition loans which can be used to acquire properties. Bridge loans they provide can be used for short term finance needs before a permanent source of funds can be secured. Development, construction and rehab loans provide the necessary hard money to complete a project. Gap financing is used to fill the gap in the funds for seeing a project through completion.

Mezzanine financing though rare for pure real estate projects is also provided by international hard money lenders. It involves both equity and debt components. Equity component doesn’t need any collateral as it provides for ownership interest in a given project. Debt component seeks collateral but involves not ownership share. Emergency funds are also provided on a case-by-case basis.

Big loan amounts and large scale projects are usually funded by international hard money loans. Due to the risk and due diligence effort involved, high interest rates and fees are a standard feature of most of these loans secured through hard money. Shorter terms ranging from 6 months to 3 years are also standard.

The major reason why investors go the hard money route is due to their flexibility. They are private funds, so they assess the risk based on their own criteria rather than some rigid government or agency lending guidelines.

When to Approach an International Hard Money Lender?

If the project is based abroad and is large scale, then it is appropriate. The amount of built-in equity needs to be quite substantial, in the range of 30 – 50% in order to be approved for a loan by international hard money investors. When time is short and quick closing is a must, these lenders can come through to make the deal happen provided the above mentioned factors are well accounted for.

Our hard money lender database contains several lenders who are willing to provide hard money for international projects involving real estate.