Collateral
Collateral refers to the property that is being used to secure the loan. This can include residential, multi-family, commercial, or raw land properties. However, it sometimes includes other assets of the individual or business borrowing the hard money. In many cases a hard money lender will offer a smaller loan size based upon a lower "Loan To Value Ratio". This means they may lend a lower percentage of the property value. Therefore it is common for real estate investors to offer additional real estate as collateral in order to obtain a larger loan amount. This is known as cross-collateralization.
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