Category Archives: Real Estate Loans

Residential Hard Money Loans – 3 Crucial Fundamentals!

Category : Bad credit home loans , Hard Money Loans , Real Estate Loans

I am 100% sure that you would not like to end up in a default situation.

But before I discuss all that stuff, I would like to ask some very
important questions…

1. Are you aware about the factors that make residential hard money loans
different from the others?

2. Are you aware of the basic difference between bogus and real
residential hard money lenders?

I would really like you to stop here for a moment and think meticulously
about these two questions. And if you are not able to answer them as “yes”,
then you can’t get success as a real estate investor.

So without wasting further time, let me answer these questions because
they are the first two crucial fundamentals, which you should know before
getting a loan.

What is the basic difference between residential hard money loans and
others?

Majority of people will start by asking the interest rate or payment terms
and conditions while analyzing this question. But they aren’t the most
important factor.

The most important factor here is the criteria, which a lender uses while
funding a loan to you. If he is asking for a credit score before giving you
a loan, this means that they are following the traditional lending rules and
they will sell your paper to banks or Wall Street.

These loans do not have any sovereignty or flexibility, which is vital if
you want to be successful as a real estate investor.

What is the basic difference between real and fake residential hard money
lenders?

There are different aspects which need to be considered while answering
this question. One of the aspect was hidden in my answer to the last
question i.e. a fake hard money lender sells your paper and don’t fund you
directly. This is really bad for you as a borrower. Let me tell you how…

If you are working in a fix and flip situation, there are many things
which can go wrong, whether you have planned for them or not. In this
situation, it is very important to work with a true lender whose success is
attached to yours.

But if your loan has been sold off to Wall Street, you could do nothing in
a problematic situation. You cannot ask for loan extension or anything else
and there are chances that you will end up in a default.

There is another type, which is known as fee collectors. These are the
people who call themselves a lender but they are not. They will just help
you in submitting a loan application and pay fees. After that, you will have
to submit your loan request to the real lender.

These fee collectors don’t care whether your loan application gets
approved or not because they have collected their non refundable fees.

You must be wondering what the third crucial fundamental is.

If you really want to be successful as a real estate investor, you need to
have a perfect plan to execute. You need to realize that real estate
investment isn’t for faint-hearted. It is for those who have a lot of guts
and courage. These are the people who can take quick action and can do
things in a short span of time.

Another important aspect is that hard money loans are short term and if
you are unable to pay it off in time, then you can get in a trouble
situation.

So, these were the three crucial fundamentals, which you need to
understand before applying for residential loans.

Top 6 Advantages Of Using Hard Money Loans To Fund Real Estate Deals

Tags :

Category : Hard Money Loans , private money lenders , Real Estate Loans

A hard money loan is a short-term financing option used to fund the purchase of an investment property. This type of loan is often a financial tool for house flippers or real estate investors whose goal is to renovate or develop a property, then sell it for a profit. Hard money loans offer huge benefits that are not typically available through traditional lenders such as banks and other financial institutions.

Here are top 6 advantages of using hard money loans to fund your real estate deals:

1. Simple, Easy And Quick Loan Process:
The application process for a hard money loan generally takes less time for you to be approved for the loan, which allows you to use your loan money quicker. This time-saving process can allow you to act on more opportunities and even gain an edge on the competition through speed and execution. The simplicity and straightforwardness of a hard money loan has made it a popular choice for all kinds of real estate investors.

2. Minimum Loan Conditions:
In order to obtain hard money loans, a borrower needs to satisfy a short list of criteria whereas a bank has many hard-set requirements, like income history, experience, etc. that need to be met. The entire process of bank loans can become drawn out and the borrower, ultimately, may not even be approved in the end. On the other hand, hard money loans are fairly simple and straightforward. If the hard money lender assesses that a borrower’s target real estate investment is an excellent value and the borrower has at least 20% equity to put into the deal, it is likely that the investor will qualify.

3. Quick Approvals And Rapid Funding of Loans:
Loan approval for hard money loans is far quicker than traditional banks or financial institutions. Traditional loans are based somewhat on your credit, it could take 1 to 3 months to secure a traditional mortgage whereas hard money loans are typically based on the value of your investment property. Since the property is the asset that is backing the loan, hard money lenders are only interested in how much value they see in the property. Depending on your lender, you could obtain hard money loans in a few days or a few weeks.

4. Flexible Term Structure:
Banks are not flexible and typically take a one-size-fits-all approach to all loan requests whereas private hard money lenders can structure repayment and collateral release terms in ways that are mutually beneficial to both borrower and lender. Greater flexibility often results in better outcomes.

5. Works With Bad Credit History:
In order to obtain traditional loans, you should have a decent credit history to meet the bank’s criterion. If you have negative items in your credit reports, the process takes even longer and you might not ever get approved for traditional loans. In the case of hard money lenders, credit history does not matter. They lend based on collateral securing the loan, and they are less concerned about your ability to repay. For hard money lenders, the value of the collateral is more important than your financial position.

6. Zero Prepayment Penalties:
It’s another significant advantage of hard money loans is the absence of prepayment penalties. Traditional financial institutions often charge hefty prepayment penalties if circumstances change and a loan is fully or partially repaid before the due date. You can avoid these fees by opting for hard money loans. Private hard money lenders are fully invested in your success and typically structure loans without prepayment penalties or added fees.

The Bottom Line:
Hard money loans are very beneficial for those who need quick financial solutions and either cannot wait for or do not qualify for conventional banking approvals. You can utilize hard money loans in order to grow your financial portfolio in short-time. Hard Money lenders can fund quickly, within a flexible structure and without prepayment penalties that can unintentionally hinder the success of your business.

If you are trying to get a hard money loan to grow your real estate business, contact one of the most trusted hard money lenders today called Magna Capital Group, Inc. We provide residential and commercial real estate hard money loans at competitive rates. We have helped hundreds of California investors get the real estate capital they need. We are a quick, simple bank financing alternative. For information about our hard money loan programs, Call us today at (310) 734 4044 or email at info@magnaloans.com.

Mortgage Preparation Checklist

Category : Real Estate Loans

If you are thinking about doing a mortgage, it always helps to know what documents
the mortgage loan originator will require from you. So here is a quick list to get you
started on your new mortgage loan.

Find Income Tax Return copies for last two years

Find W2 forms for last three calendar years

Find business (C-Corporations, S-Corporations, Limited Liability Companies,
Partnerships) Income Tax copies (if Self-Employed) for last two years.

Find K-1 forms for last three calendar years (if Self-Employed)Collect pay documents (one month’s worth of pay check stubs, a Social Security,Pension, Annuity AwardLetters, adoption stipend stubs and/or county printout of child support payments received)

Collect asset documents (two months most current bank statements for all checking,
savings, and money market accounts, last two statements received for all IRAs, 401Ks,Stockaccounts,and Annuities,
HUDs from recent property sales) Note that state, county and federal retirement accounts for current employees do not count as assets.

Collect situational documents (Divorce Decree, Bankruptcy discharge letter and list
of creditors,

leases for Rental Properties, Tax Appraisal notices for Rental Properties,
Homeowner’s Insurance

Declarations Pages for Rental Properties, proof of payment for Judgments, Tax
Liens or collections.

Obtain statement of Whole Life Cash Value (if applicable)

Find Survey (if Refinancing and in a state that uses surveys)

Find Homeowner’s Insurance Declarations Page

Write down the names, addresses and telephone numbers of all landlords for the
past two years

Write down the name, address and telephone number of the Human Resources
department for all jobs.

Simple Guidelines To Find And Apply For A Mortgage Loan

Category : Real Estate Loans

Planning to apply for a home loan mortgage? If yes, then there are two important things that you need to be careful about. In most of the cases home mortgage loans are applied for to make obligations for any house that an individual is planning to purchase. As few individuals cannot afford to purchase a house from cost instantly, they acquire a loan to help them spend it out.

Home loans can be provided by banking institutions, personal loan companies or other banking institutions to an individual looking forward to purchase a house. But it is not so simple to get the loan as you are also required to pass through certain requirements to make sure that you will be repaying the cash due.

Few loan providers are lenient as compared to the others but could be rather expensive in the long run. You have to be wise in a situation like this. It is obvious for the lenders look for alternate ways of earning money in case you do not pay back to them.

Once you have the best idea of the loan you want to apply for, it’s your decision in order to determine if you’re able to pay the actual mortgage repayments long-term. You can use a mortgage loan calculator to calculate your monthly mortgage repayments. It can also help you calculate general mortgage payments taking into account the interest price you will pay for, income taxes and the insurance. Mortgage calculator makes it easier for you to determine that the loan is achievable or payable or not.

Purchasing a house is not an easy thing to do, especially for those who have a poor credit score. If you have less credit scores, then in most of the cases, your loan does not get authorized. If the loan doesn’t work, you should go about choosing a less expensive house to purchase

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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    8730 Wilshire Blvd., Suite 410
    Beverly Hills, CA 90211

    Although Magna Enterprises, LLC and Magna Capital Group, Inc. are referred to throughout the text of this website as Magna Group of companies, they are not affiliates, parent or subsidiary companies as both companies are separate and distinct entities. Any questions or issues regarding this disclaimer should be addressed in writing c/o Shawn Molem.

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