Three easy steps to choose a hard money lender
Category : Hard Money Loans
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.