Category Archives: Hard Money Loans

6 Major Characteristics of a Hard Money Loan

Category : Hard Money Loans

If you have opportunity to invest in property, you may need a hard money loan to proceed with the purchase. Hard money loan is a financing tool which helps to acquire residential or commercial properties so that you can purchase, and then resell it.

A hard money loan has many important features.

1. A hard money loan is one where investors gain access to the funds to purchase a property for resale. The idea is to make a profit, but in many cases is not to live in the home. Yet, a hard money loan can help a home owner because it can allow an investor to purchase their home when they desperately need to sell it quickly.

2. A hard money loan can only be based on collateral. The collateral is the home or housing units. What is more, because of the risky nature of the venture, only approximately 50% to 75% of the normal property value will ever be covered by a hard money loan. This is because the value being considered in the loan is based on the immediate purchase price, which refers to the amount of money the seller could get if he was forced to sell within a one to three month period.

3. To get an investment property loan, you don’t need to have good credit. The important considerations are whether you will be able to pay back the loan, whether the property is worth the money being lent, and whether you have a sizeable down payment.

4. You should never expect to have an early payment clause on a hard money investment property loan. This is because the very nature of the funding product is that the money is just being lent for a short time. No one expects you to keep the loan in the long term. You are not legally bound to pay off the loan immediately, but the expectation is that you will.

5. A private money loan has a higher rate of interest than prime mortgage rates. However, it is much riskier for the lender. The person usually has worse credit and probably does not live in the home. The people who take out a hard money loan often would not even qualify for a regular mortgage. By getting a hard money loan, they can take advantage of an opportunity they might not otherwise be able to fund, and therefore be able to make some money.

6. Hard money loans are faster to approve and are usually approved within a few days. You usually have the ability to borrow up to 75% of the property’s value.

Conclusions: A hard money loan is the right choice for you to purchase residential or commercial property.  The advantages of easy access, convenient requirements and rapid processing allow you to make your dreams of real estate a reality.  If you need a hard money loan and have any additional queries, call Magna Capital Group, Inc at (323) 655-6888 or visit https://magnaloans.com/beta/

Top 10 Questions To Ask A Hard Money Lender When Applying For A Loan!

Tags :

Category : Commercial Loans , Hard Money Loans , private money lenders , Residential Loans

A hard money loan is one of the easiest and fastest financing options to fund your real estate deals, but it’s also more important to select the right kind of hard money lender for your needs. This will help you to avoid getting into a bad situation with a hard money lender who isn’t able to deliver what you need or adds extra junk fees to the loan at the last minute.

Here are top 10 questions you must ask when seeking out a hard money lender and submitting your hard money loan application:

1. Are you a certified lender?
Make sure that the hard money lender is licensed. If a lender is licensed and state approved, that individual is bound to follow state-mandated rules which provide customer protection. Their license ID should be displayed on their official website and any advertising material they produce. One example is the Magna Capital Group, Inc., you can see license IDs in the bottom of its website www.magnaloans.com.

2. How much experience do you have in hard money lending?
It is best to choose an experienced hard money lender for your project. An experienced hard money lender that has been in business for years, they can understand the cyclical nature of the industry and suggest you the best loan for your real estate investing business.

3.Do you have references from previous borrowers?
You can ask hard money lenders to show their reviews and testimonials by their previous satisfied clients. A reliable hard money lender should not hesitate to give references of their previous satisfied borrowers. The lender may have reviews or testimonials on their own website or third party websites.

4. How do you fix your Interest Rate?
The interest rate completely depends upon the Lender. They determine interest rates by the property type, risk analysis, and your credit rating. Generally, hard money loan interest rates are range from 8% to 18%, but there is greater flexibility in hard money loan rates for quality borrowers.

5. Are there any other charges that will be applied for obtaining the hard money loan?
Some hard money lenders quote interest rates and points and then conveniently wait to inform the borrower of other documents, origination or processing fees. So make sure to ask hard money lenders about all the charges which affect the total cost of the loan.

6. What loan to value(LTV) can you offer?
The LTV is the funding amount a lender provides on the basis of the existing value of the property. The LTV can vary from lender to lender and property type. Some hard money lenders lend on the after repair value (ARV) as opposed to the more conservative current value or purchase price.

7. What types of loans do you offer?
Some hard money lenders are specialized in a particular loan category, while others have a broad loan portfolio. So make sure you select a lender that is more accustomed to a broad loan offering and aligned to your project’s needs.

8. Is there a prepayment penalty?
It’s not uncommon for lenders to charge a small prepayment penalty which means a minimum amount of interest must be paid on the loan. In many situations, the prepayment penalty will not affect the borrower in any way. If there is a prepayment penalty, the borrower must make sure it works for their proposed timeline.

9. How long of a loan term is available?
Hard money loans are normally for short-term use only. Generally, hard money lenders offer 1 or 2-year terms but some lenders may also offer 1 to 5-year terms. Longer the term can lead to increased costs or interest rate. So you must make sure your timeline works with the lender’s loan terms.

10. How long will it take to fund the loan?
It’s important to know how fast your loan can be funded. Hard money lenders should be able to approve and fund a hard money loan within 2 weeks. Magna Capital Group, Inc. can fund hard money loans within 3-5 days in some cases if the funding is necessary to save a deal.

The Last Word:
Choosing an experienced and reliable hard money lender is a very important task in order to make your real estate investment project success. By asking these questions, you can get a good sense of the lender’s services and criteria, helping you to find just the right one for your investment property.

Magna Capital Group, Inc. is one of the most trusted hard money lenders in California, provide hassle-free equity-based private and hard money loans for residential and commercial properties. We understand the most complex hard money loan scenarios and provide asset-based hard money loans to real estate investors, builders, property owners. individuals, corporations, LLC’s, partnerships, trusts and other legal business entities. For more information about our Hard Money Loan Programs, Call Us Today at (310) 734 4044 or Email at info@magnaloans.com.

Easy to Borrow Hard Money Loans

Category : Hard Money Loans

The money that is being lent to resolve some important financial issues is stated as hard money loan.
The hard money loans are not the loans that are presented by banks or any other financial
organizations rather these are provided by the private financial companies, also known as hard
money lenders. 
Hard money loan is usually the final option for the borrowers. It should be unstated like if one desires
to sell their business venture or the assets and also believes with a little bit of repairs and
reconstruction the money produced can be quite large then hard money loans can be great matched
choice for them. All that you are required to do is to get the loan, use it efficiently, make some
additional money and bring it back.
The exclusivity of hard money loans lies in their different aspects like they get private lending
resources. They accompany with the short interest term of one to three years and they accuse upfront
price on closing prior three months of the due date that is quite sky-high. Hard money comes in
various types like hard money business loans or residential hard money loans. The hard money loans
are normally protected by properties of commercial viability.
Hard money lenders obtain the money rooted in the estimated rate of the commercial or residential
property. The borrowers are interested in funds generating real-estates like shopping malls, hotels,
hospitals and apartments and so on. 
There are people who have mortgages rejected by the banks and other financial companies due to
various reasons like getting a bad credit record, non competence to pay as they deficient in desired
income, etc. Hard money loans are also required by individuals who are falling behind in the
repayments of their finance or are afraid of the foreclosures.

Commercial Hard Money Loans – Smart Solutions For Purchase Or Refinance Commercial Properties!

Tags :

Category : Commercial Loans , Hard Money Loans

Have you tried everything to get your commercial real estate financed and grown tired of getting your commercial mortgage loan request rejected? If so, there’s one more commercial real estate loan option that you should try as your absolute last resort to get your deal funded, and that’s a Commercial Hard Money Loan. These loans make a great deal of sense because not all commercial buyers qualify for financing through traditional lending institutions.

Hard money commercial lenders look primarily to the property as their source of repayment and that’s why the whole loan process gets fast & easy. These loans are specially designed to help acquire, construct or simplify payments for income producing properties, such as retail centers, office complexes, hotels, and apartments. Commercial hard money loans can also be used for various other purposes, such as advancing businesses, refinancing existing loans etc. The primary rationale for borrowers considering a commercial hard money loan is that traditional commercial financing options are not viable for them cause of their low credit scores or a need to obtain commercial financing quickly.

Why Commercial Hard Money Loans?

Fast Approval and Funding:
The most common advantage of commercial hard money loans is their speedy approval and funding. These loans can be processed within a day because the lender will only consider the property, your equity or down payment, the exit strategy for the specific property, your experience, and cash reserves to make the monthly payments.

Fewer Loan Requirements:
Commercial hard money loans have fewer requirements compared to bank loans. Some of them include having enough cash to make the monthly loan payments, adequate equity on the property, ample experience in some cases, and a reasonable exit strategy. Because these types of loans have fewer requirements, their chances of approval are high. On the other hand, banks have strict and lengthy requirements meaning that make it difficult to get a loan approval.

Available For Variety of Real Estate projects:
Commercial hard money loans can be used to fund projects that aren’t financed elsewhere. Most commercial hard money loan providers approve loans that banks cannot. For instance, fix and flip loans. This involves purchasing a property after applying for short term commercial hard money loans and making the necessary repairs before selling. Because the property is to be sold as quickly as possible, you will only need a 12-month loan which isn’t offered by conventional lenders.

No Prepayment Penalty:
There is no prepayment penalty with commercial hard money lenders. They do not impose restrictions on a borrower for paying back the money they borrowed. A Borrower can pay back some or all the money they borrowed, at any time during the loan term without incurring a prepayment penalty.

Flexible Loan Terms:
Commercial hard money lenders are flexible with their loan terms. Flexible loan terms offer more control over how you repay your borrowing. Hard money lenders are not restrained by regulatory requirements, shareholders, and red tape.

The Bottom Line:
Commercial hard money loans are smart solutions for purchase or refinance commercial Properties. If you have plans to purchase new or existing commercial properties, you can take out a commercial hard money loan to help finance the purchase and any development or construction after the fact. Commercial Hard money loans offer a short approval process, interest-only payments, flexible loan terms and can fund the purchase and renovation of an investment property quickly.

Magna Capital Group, Inc is a commercial hard money lender providing financing solutions & commercial loans for mortgages to real estate owners. We have the proven track record as a premier hard money commercial lender to help. We offer loans for purchase or refinance and help to make the typically complex commercial real estate purchasing process as simple as possible. We understand even the most complex commercial hard money loan scenarios and provide asset based hard money loans to real estate investors, builders and commercial property owners. We offer some of the most favorable commercial hard money terms in the industry.

If you looking for the right kind of commercial real estate loan, Call us today at (310) 734 4044 or email at info@magnaloans.com to find out the facts about commercial real estate loans and determine if they are appropriate for you at this time.

Hard Money in Real Estate Funding

Tags :

Category : Hard Money Loans , Real Estate Loans

Real estate funding is crucial to your real estate investing success, and contrary to popular belief it’s really not that hard to find the money.

I believe the number one most frequently asked question for a newbie investor is “were do I find the money to fund my real estate deals.” This is perhaps the biggest concern if not the main concern newbie investors face when starting to invest in property.

Believe it or not it’s actually easier than you think to fund most if not all your investment properties, even in today’s tough economy, with no credit, bad credit, little money, or no money.

You literally have access to over $1,000,000, if you know where to find it of course. The problem is most new comers don’t take the time to educate themselves in the importance of finding, funding, fixing, and flipping deals correctly.

Let me explain how the system works…

Most of you go out and try to find the money first and what happens next is you have absolutely no leverage. While you might have a sound proof plan you still have nothing to leverage it with.

Most private investors, at least the one’s I’m going to be teaching you about need to see a property first.

Why? It’s simple, having the property in contract is going to give you the leverage you need, but it can’t just be any property out there. You have to buy right. Meaning you must purchase the property at a wholesale price. This will determine if you’ll get real estate funding for your deal or not.

I can imagine what most of you may already be thinking. “How can I buy a property if I don’t have any money or credit, it’s just not possible.” How wrong you are.

Find the deal first and the money will come. I can almost Guarantee it.

Understanding how to find the deal first will give you leverage to fund all your deals.

Let me give you an example of what a good deal should looks like.

It’s a secret most newbie investors struggle with when learning how to buy a property because they simply just don’t know how much to pay for a property. I like to call it the 65% Rule. What is the 65% rule? The 65% rule means you don’t offer to purchase an investment property for more than 65% of the fair market value.

So let’s just say you found a distressed property that you know once it’s been rehabbed is worth $100,000 fair market value.

By using the 65% rule you would multiply it by $100,000 or $100,000 x.65 which would equal to $65,000.

In the example above I would offer no more than $65,000 for the distressed property. This leaves you a safety net and a potential profit margin of 35% or $35,000 not including closing costs.

Can you see your leverage power now!

Do you understand how powerful the 65% rule is. Now you see why I’m telling you to first find the deal in order to acquire real estate funding. By following the 65% rule you can acquire real estate funding with little or no money and no credit or even bad credit. I bet you’re wondering who these lenders are right about now?

These lenders are what we investors call hard money lenders.

Unlike the traditional banks that want to check your credit and your income, hard money lenders lend you money based on the property and not you personally.

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