Southern California is often one of the hottest real estate markets in the country. People from all over the country and world are drawn to Southern California for its weather, beaches and laid-back culture. The Southern California weather and lifestyle creates a high demand for real estate, especially in the coastal areas.
Real Estate Investing in Southern California
Knowing that there is a very high demand for Southern California real estate, many real estate investors choose to invest in the region. Competition during a mature and rising real estate market generally increases even further as many prospective real estate investors look at recent past returns and expect the trend to continue into the future.
Veteran Southern California real estate investors understand that prime real estate and opportunities must be secured quickly once identified. Investors need to act quickly with fast financing such as hard money loans. Conventional financing from a bank or credit union that may take 30+ days to fund may not be sufficient to get the property under contract and closed.
Many real estate investors depend on the services of an experienced Southern California hard money lender such as North Coast Financial.
Competing against Cash Offers with Hard Money Loans
In Southern California and other hot real estate markets, real estate investors offering all cash offers has become a common tactic. Sellers are more likely to accept all cash offers because they can close very fast and there is no worry that the buyer’s financing will not come through. Once the real estate investor has closed the sale with the cash offer they can simply do a cash out refinance and invest the funds elsewhere.
In a real estate market with many investors offering all cash, real estate investors without an all cash offer are under pressure to provide more attractive offers to sellers. An investor can consider an offer with a significant down payment (30%+) with hard money financing and a 14 day escrow to attempt to compete with the all cash offer.
With so much competition, real estate investors in need of fast financing must work with a dependable lender such as North Coast Financial.