Are you a fix-and-flip investor who's having trouble selling your property, and your hard money loan is coming due? You're not alone. In this tight market, many investors are facing the same issue. You don't want to lose your property to foreclosure, but you don't want to sell it at a loss either. In this blog post, we'll discuss how you can get a temporary loan and avoid defaulting on your hard money loan when your property won't sell.
Take It off the Market
If your property is on the market, take it off. Most lenders won't fund a property that's on the market. They prefer that the property isn't listed at the time of funding. You can list it again later when you've secured a new loan.
Be Realistic About Your Property's Value
You may have a good amount of equity in your property, but be realistic about its current value. If it's not selling, it's probably priced too high. You don't want to end up paying more in interest and fees because you're holding out for a price that's not realistic.
Refinance and Extend
Be proactive and see if you can refinance and extend your loan to a 12 or 24-month bridge loan. This will give you more time to sell your property or rent it out until the market improves. It will also help you avoid default interest, which is usually much higher than your current interest rate.
Rent It Out
If your property isn't selling, consider renting it out. This will provide you with a steady stream of income that you can use to pay off your hard money loan. You can also list it for sale again later when the market improves.
Get Creative
Talk to your lender and see if they can help you come up with a creative solution. They may be willing to work with you to extend your loan or provide you with a temporary loan. They may also have other solutions that you haven't considered.
In conclusion, if you're having trouble selling your property and your hard money loan is coming due, don't panic. Take it off the market, be realistic about its value, refinance and extend your loan, rent it out, and get creative. By taking these steps, you can avoid defaulting on your hard money loan and protect your investment.