Monthly Archives: March 2015

Hard Money Lenders: A Better Option to Your Money Problems

Lack of funds is the biggest problem that a real estate investor can face. However, if you’re thinking of joining the real estate game, don’t let simple challenges put you back from taking the first step towards financial freedom. Because there are a huge number of hard money lenders who are willing to provide funding for your real estate investments.

Lenders of hard money offer the perfect solution to your real estate financial miseries. By providing you access to quick cash, it would be easier for you to present proof of funds when buying investment properties and close profitable real estate deals.

While choosing to go with the hard money lenders, you will need to give them the assurance that they will not regret their decision to provide financing for your real estate investments. You can do this by finding a profitable investment property and offering them as collateral. By borrowing hard money for a property that has high ARV, it would be easier for you to convince a lender to approve your loan application.

It is also to build good relationships with lenders of hard money loans. Hard money lenders love working with real estate investors who show a great deal of professionalism. By promptly answering inquiries and returning phone calls on time, a lender will find it much easier and convenient to work with you, which, in turn, boost the probability of your loan application being approved

Common reasons why people go for hard money loan

Hard money loan is a specific type of loan that is provided to the customers who own a home; the loan is based on equity. There are many companies that provide hard money loans. This type of equity based loans has become very popular; people hardly have time in hand these days. Hence, hard money loan is the only solution when you are in dire need of money.

While choosing for the hard money lender, your credit score is not considered. People with low credit score can also qualify for this type of loan. Such loans are secured by property; the quick sale value of the property to be precise. It means, if the borrower defaults and the property is sold to pay off the debt, then the hard money lender will be the first person to receive their share.

Here is a list of reasons why people go for hard money loan:

• The hard money lenders are better aware about the commercial world and various other aspects of personal finance.
• In most cases the lender offer approval within very few days of initial contact and extend the money within few hours after the loan approval
• The complete loan process is simple and hassle free. You are neither required to submit much paper work not to accumulate huge documentation.
• Credit score of the borrower is not a matter of importance. The lender will not check income, savings account statement or any other financial records – no question is a great feature of hard money lending. 

Three easy steps to choose a hard money lender

To select the best hard money lender for your commercial real estate is one of the major steps while going for a hard money loan. But with a bit of research, it becomes easier to reduce the options to a couple of best and selected funding sources. Following are the three steps that could be considered while choosing a hard money

1: Location of the property: Most of these hard money lenders stay in their own home state or few states around where they’ve got better knowledge of the market dynamics and may check out the property with relative ease. However, there are private money investors that offer financing nationwide or even international. It is important to make sure the fund manager has a good knowledge of values in the region in which the property is located. The better the lender knows the marketplace, the more flexibility you have when it comes to appraisals

2: Loan amount: Hard money lenders in LA are often specific about how much they will lend on a transaction. Most have minimum or maximum loan amounts as they have in their own guidelines

3: Loan to Value ratios: Most of the hard-money lenders finance the same ratios. You’ll likely be presented a hard money loan between 50 % to 65 % of property value depending on the type of the property, credit worthiness, income and cash flow of the property and borrower and of course location of the property. For example income producing apartment buildings in major markets are more favorable than a vacant gas station property in a rural area.

There is a hard money lender available for every most property type and just about any required dollar amount. You only need to find the most the suitable one for you.