Author Archives: Shawn Molem

Great Facts on Hard Money Lending

Category : Buying & Selling Tips

A. Hard money loan is a loan in which the borrower gets funds based on the value of a property as opposed to the traditional lending criteria that banks look for such as credit scores, tax returns, and income statements.
B. Hard-money loans are bridge loans, which are used for real estate acquisitions, refinancing, foreclosures and investors who need to close quickly.
C. Because these loans are based on the property’s equity, hard money lenders will examine the property to determine if the property value justifies their loan to you.
D. Having problems finding traditional financing in time to rehab your investment property? A hard money loan may be your solution if your credit is less than perfect. Yes, the interest rates are little higher, but you have the ability to act quickly and rehab your investment property so you can flip and get your profit. When you are obtaining a hard money loan, use caution and know what you are getting into. Check references. As in any business, there are unethical lenders out there so just be thorough and check the lender out.

Easy steps to get Hard Money Loans

Category : Hard Money Loans

Who Should Use a Hard Money Loan?

Category : Uncategorized

Real estate investors choose to use hard money for many different reasons. The main reason is the ability of the hard money lender to fund the loan quickly. In most situations, hard money loans can be funded within a week. Compare that to the 30 – 45 days it takes to get a bank loan funded. The application process for a hard money loan generally takes a day or two and in some cases, a loan can be approved the same day. Good luck hearing back about a loan approval from your bank within the same week!
The ability to obtain funding at a much faster rate than a bank loan is a significant advantage for a real estate investor. Especially when the real estate investor is trying to acquire a property with many competing bids, a quick close with a hard money loan will get a seller’s attention and set their offer apart from the rest of the buyers offering slow conventional financing.
Another reason a borrower may choose to use a hard money loan is that they have been rejected by the banks for a conventional loan. Life doesn’t always go as planned. Short sales, foreclosures, credit issues… they happen. Another important thing banks need to see is income history. If a potential borrower recently started a new job, the bank may deny the loan request due to insufficient income history, even if the borrower makes a healthy income. Hard money lenders are able to look past these issues as long the loan be repaid and the borrower has enough equity invested in the property.

Five reasons to choose a hard money lender when looking for a real estate loan

Category : Hard Money Loans , Uncategorized

1 Rapid Response

Hard money lenders are investors who have decided to make their money work for them. As such, they are extremely interested in consummating timely deals. Count on a quick decision at every step of the hard money loan process.

  1. Capital Availability

Similarly, a hard money lender is not constrained by the risk tolerance of a loan committee or by government regulation. If the lender considers that the interest rate justifies the risk, he can make any deal he wants to

  1. Flexible Financing

While there are a variety of traditional real estate loans ranging from commercial “balloon” notes to traditional residential mortgages, they are, by and large, fixed in stone when it comes to terms and conditions. Hard money loans, on the other hand, are controlled by far fewer constraints. Hard money loans do require title searches, escrows, and insurance but these items are meant to protect the lender AND the borrower. The financial terms of the deal, however, are completely up to the parties involved.

  1. Business Experience

Real estate investment involves a wide variety of techniques and courses of action. Hard money lenders can examine the particulars of a deal and understand its mechanics to make an informed decision.

  1. Price

As with any other real estate investment, the interest rate is dependent on the risk involved in the deal. Nevertheless, interest rates are comparable to many traditional bank loans especially when upfront bank fees are considered. A borrower may not always get the lowest interest rate, but on a short term deal, hard money lenders may still be the most affordable option

5 Ways To Find Hard Money Lenders

Category : Hard Money Loans

Finding private money lenders is not as hard as it may seem. Given the number of borrowers looking for money and the continuing reluctance of traditional lenders to enter the market, the private lending market has expanded to fill the need.

1. Talk to your Friends. Odds are that your friends have existing relationships with hard money lenders. They may be willing to connect you with their lending sources. At the same time, some of them might even be involved in private lending themselves.

2. Network with escrow companies. Escrow companies know where the money for the deals that they close comes from, even if the actual lender information does not get recorded as a part of the deed. If you can build relationships with a few goods, and active closers, you can usually get them to tell you which lenders they see regularly, even if they cannot disclose which lender closed on which deal.

4. Research closed deals. You can also do the leg work yourself by researching closed deals. Private money lenders in California that take security interests in the properties will have their information included in the recorded trust deed. Alternatively, you can also call the buyer and ask them who they used as a lender.

5. Talk to real estate attorneys. Those that specialize in working residential investment transactions should also have a sense of active lenders in the market and can help you find good lenders, especially if they know that you will return the favor by steering the business for the closing back their way.

Finding private money lenders in California is not a simple process. However, by using a combination of research, your connections, and the assistance of the American Association of Private Lenders (AAPL), you can build a book of high-quality lenders that can help you close deals for your clients.

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