Author Archives: Shawn Molem

How Hard money Can Help You

Today most of the real estate investors rely on private money loans for financing their property investments. Some time it gets a bit difficult to take loans from the hard money lenders, as some lenders do not understand the concept of rehab and resell investment strategy being used by thousands of real estate investors all over the country. Nowadays there are various types of hard money lenders who can match up with your funding requirements:

• Lenders doing commercial properties
• Development lenders
• Bridge lenders
• Lenders who give loans for high end homes
• Single family home lenders

By understanding your business model & its requirements, you can identify the best matched hard money lender that help your investing needs. Private hard money lenders are different from the bank, as they do not sell the paper to external institutions . Private lenders are group of investors who require higher interest rates. That’s why they choose to invest in real estate.

Things to keep in mind while applying to Hard Money Loans

If you have a fantastic deal or need funding in two weeks or faster, but you cannot go to a local bank because of your bad credit. Then hard money loans are just for you. All you need to do is pay more money for the loan bottom line than your local banker, but will be easier and quicker to close your deal. Below are some of the important things that one should keep in mind when applying for a hard money loan:

Reasons Why You Should Consider Hard Money Loans

Hard money loans are the most easy & hassle free loan today. It is mostly referred to real estate investors as asset based lending. The collateral on the loan becomes the real estate. They are far from conventional loans, since the underwriting guidelines that private money go by are far different from your local banks. Below are some of the few reasons why one should consider a hard money loans:

• Fast process – Hard money loans are closed in 5 – 14 days if compare to banks, once the complete documentation is done.
• Minimum Documentation – Less documentation as compare to tradition lenders. Loan amount is based on the value of the property and not depend on the credit rating.
• Credit Rating – Having a low credit score is not an issue, people with bankruptcy and credit scores under 490-600 do not have any problem, whereas banks always require a great credit history.
• Flexibility – Hard money loan are more flexible, as there are various options present to match up with your needs.
• Higher Risk Deals – Churches, non-profit are not a problem with hard money lenders, but are with traditional lenders who are concerned if they have to foreclose on a church loan, and the bad publicity they will receive.
• No personal guarantee require – Hard money Loans are based on the value of the property so no personal guarantee is required.

How to Get Hard Money Loans

Getting hard money loan is one of the most easiest way to get finance for your real estate investment. The easiest way of finding hard money lenders is through web. The major reason behind getting hard money easily is because, the borrower don’t need to go through the traditional way, as showing the credentials, such as job or credit history. Hard money loans are ONLY given on the basis of property you are buying. In-order to provide you hard money loan most of the lenders will check your credit report & other documents but on the other hand a true and experienced lenders will only check your documents only to determine your interest rate, origination points and the duration of loan.

If you are not able to get a true hard money lenders online then you can also check on REI (Real Estate Investment) club. Where you can talk to other investors & their review can help you to select the better hard money lenders  locally.  Hard money work more quickly as compare to the any bank or financial institutions, and can easily offer fund to the borrower with in 7 business days. Apart from this if you have faced any kind of bankruptcy in the last 24 months or don’t have current tax liens, you could easily get a hard money loan.

Even if a lender is advertising “no money down”, they are basically talking about the loan, which doesn’t include points. To sum up, if you want to get a hard money loan, it is necessary to find a good property and a true lender.

Investing with Hard Money Loans

Many real estate investors face situations where they require more money as compare the traditional lenders lend. At this point of time hard money lenders helps the investors by providing the required amount to the investor.

Hard money lenders are basically private money lender who offer loans for a short term. These loans have a very strict repayment schedule and the interest rate are also high as compare to the bank & financial institute. Hard money lenders also charge fees upfront, ranging between 4 – 10 points. Hard money lenders gives the investors to access the capital that is asset based, wherein the loan amount is secured. The rate of interest ranges between 14 to 18 percent annually and the term of the loan is normally six to twelve months.

Hard money lender may also require credit reports and well as documented experience in previous deals you have done along with the property as security. Further the money lender also perform property inspection before approving the hard money loans.

The terms & conditions for approving real estate investing with hard money loan, may vary for different lenders. The investors have to find the perfect lenders suitable for them, and ensure that they keep a good relationship with them, as such types of loans are useful for procuring or purchasing properties.