Switch to ADA Accessible Theme Close Menu
Call Today to
Schedule a Consultation
Bronx 718-822-2203
Bilingual in Spanish
Westchester 914-235-8500
Home > Blog > Real Estate > The Role of Short-Term Real Estate Loans in Today’s Real Estate Market

The Role of Short-Term Real Estate Loans in Today’s Real Estate Market


If you own a house, you probably think you know how the real estate world works.  You gather enough money to place a down payment and keep up with your bills so that your credit score is high enough for you to qualify for a home mortgage, and then you make an offer to buy the house.  When you did this with your own house, it may have worked so well that you are considering buying a second house as an investment property, which, as you have discovered, is a phrase that makes real estate agents’ eyes light up.  That isn’t true real estate investing, though, and you are not a true real estate investor.  If every skyscraper in New York belonged to one person who had enough money to place a down payment and then pay off a mortgage over 30 years, New York would be even more of a dystopia of wealth inequality than it is; no one would have enough food to leave a slice of pizza lying around for Pizza Rat to run off with.  Things move faster in the world of real estate, and the numbers are sometimes bigger, but always less precise.  For help wrapping your mind around the concept of investing in short-term real estate loans, contact a Bronx real estate attorney.

30-Year Home Mortgages Are for Chumps Who Depend on Employment Income

Chumps like you and me, who live paycheck to paycheck, pay off our home mortgages over 30 years, perhaps refinancing when mortgage rates are lower than they were when we bought.  Money launderers pay cash for real estate properties.  What do investors do, though?  Often, when they want to build or renovate a house and then rent it out, they take out a short-term real estate loan, which is like a home mortgage in that it is secured by a real estate property, but the repayment term is much shorter, usually between three and five years.

Should You Invest in Short-Term Real Estate Loans Even If You Aren’t Rich?

These days, with real estate so unaffordable, banks are understandably cagey about lending to homebuyers and small-time real estate investors.  Therefore, private credit funds are stepping in to meet the demand for short-term real estate loans.  Arrived is a real estate investing platform that enables participants to invest small sums, as little as $100, toward short-term real estate loans; the loan amounts tend to be less than $500,000.  While the interest rates are higher than conventional home mortgages, they are lower than bridge loans; the interest rates on loans borrowed from Arrived’s private credit fund tends to be between seven and nine percent, with the interest paid out to investors.

Schedule a Confidential Consultation With a Bronx Real Estate Attorney

A real estate lawyer can help you make wise decisions about investing in real estate properties or short-term real estate loans.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.



Facebook Twitter LinkedIn