Five Simple Requirements Of Getting Hard Money Rehab Loans

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Five Simple Requirements Of Getting Hard Money Rehab Loans

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Category : Construction Loans , Fix & Flip Loans , Hard Money Loans , Hard Money Rehab Loans , private money lenders

A hard money rehab loan is a short-term financing option used by real estate investors to purchase and renovate investment properties. Hard money rehab loans allow investors to purchase homes in need of renovation and rehabilitation under terms that are more flexible than traditional, long-term mortgage loans. Rehab loans are issued as a percentage of a property’s expected after-repair-value (ARV). A property’s ARV is equal to the expected amount the property will sell for after all renovations are made.

Hard money rehab loans usually have a quick approval process, 06-12 months financing terms, and good interest rates between 7.5% – 12%. Hard money lenders offer rehab loans of up to 75% ARV and can get investors funded in as little as 10 days. Further, they fund the purchase and renovation of both single-family homes and multi-unit properties, as well as offer interest-only payments, making it a good option for rehab investors.

If you found the perfect Rehab or Flip Deal and can’t find a traditional bank to lend or approve the financing you need, hard money rehab loan would be the best option for you. You can utilize easy lending criteria and quick closing services of a hard money lender that will finance a rehab loan quickly than a traditional bank. Every hard money lender has a set of requirements to fund and close a rehab loan. Here are some of the basic information required by most hard money lenders:

1. Interior And Exterior Photos Of The Property
You will be asked to provide photos of the exterior and interior of the subject property. For external photos, it would be ideal to provide a front, rear, sides of the property, as well as street scenes. For the interior, a few images of the various room, units, property amenities and good to see images would be helpful. You can also provide extensive photos of the property areas that will be repaired, replaced or removed, digital copies and a walk-through video. The more pictures submitted, the better the chances of approval.

2. Bid For Repairs:
Hard money lenders will require written estimates in order to process rehab loan application. You can contact a local contractor, handyman or repair specialist and get written estimates. Also, if you plan on painting and doing the make-ready yourself – still get a bid for repairs to give to your potential hard money lender.

3. Purchase Agreement:
They will need to see a signed copy of the purchase contract, the title company, and special escrow funding instructions if any. A real estate purchase contract is a binding agreement between two or more parties for the purchase, exchange or other conveyance of real property. Showing them a copy of the contract you plan to use is still a smart move and will make your property report compete and legit.

4. Proof of Insurance (POI):
You will need to provide proof of insurance to your hard money lender. It’s a type of documentation that a person can provide to another individual proving that the person has valid insurance with an insurance company. You can contact your insurance agent and get a quote for liability and hazard insurance for your hard money lender. This will ensure that the lender will be repaid in the event of the severe act of vandalism or catastrophic loss that occurs.

5. Preliminary Title Report:

This document is a tricky one. Some hard money lenders prefer to work with the certain title company. If you have a preliminary title report or confirmation that there is not a clouded title share this information with your potential hard money lender, else you don’t need to purchase title insurance or a full certified report.

Each hard money lenders have their own unique set of requirements based on their lending area, property purchase price, commercial vs residential, and loan repayment terms, but they always like to work with well informed and serious real estate investors.

The Bottom Line:
Hard money rehab loans are great for the fix and flip projects and for buying rental properties that need a small repair work done. Hard money rehab loans offer real estate investors a short-term loan with interest-only payments, quick approval times, and facilitate both the purchase of a house and it’s rehab costs into a single loan.

If you are looking for hard money rehab loans, take a few minutes to read these basic requirements to get your real estate investment deals funded quickly. To apply now or to get more information on our hard money rehab lending programs, contact Magna Capital Group, Inc. today and speak with one of our expert representatives at (310) 734 4044 or email at info@magnaloans.com.

What To Do If Bank Denied Your Mortgage Loan Application?

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Category : Hard Money Loans , Mortgage Loans

If your bank has rejected your mortgage application, it means there is something wrong with your financial records. You might want to know what to do next, why were you denied, how long do you need to wait before applying again, and what steps can you take to prevent it from happening again? It’s important to know the real causes of your loan rejection because it will probably continue to happen if you don’t take action.

Here are some important steps that you should take after your mortgage loan rejection:

Find Out Rejection Factors:
The first thing you should do is find out exactly what happened. Once your mortgage loan application denied, the bank is required to provide specific reasons in writing within 30 days explaining why they’ve been turned down. The most common reason for mortgage loan application rejection is either insufficient income or bad credit. This step will help you to know the actual causes of your loan rejection and make the right decisions without repeating the same mistakes, so that your loan application may get accepted in the future.

Understand The Problems and Fix Them Quickly:
To avoid your future loan rejection, it’s important to understand the actual reasons for your previous loan rejection. This is a very helpful step if you’re considering re-application in the future. Once you identify the problems, take the necessary steps to make it right. Make sure that your credit history and monthly income is up to the eligibility criteria. If you cannot fix these issues, then you might want to consider the next step.

Check With Other Mortgage Lenders:
If you’ve been denied by the bank, it doesn’t mean every lender will reject your application. There should be many hard money lenders in your locality who can help you out. They can provide you better loan programs that can more accurately fit your financial requirements.

The Bottom Line:
If you are unable to fix those issues due to which your loan application was denied by the bank, hard money loans would be the best choice for you. A hard money loan is simply a short-term loan secured by real estate that can be obtained faster and easier than a conventional loan. Hard money loans are backed by the value of the property, not by the creditworthiness of the borrower.

Hard money loans are very beneficial for those who cannot qualify for conventional loans cause of their poor credit score or bad financial records. If you need quick financial solutions and cannot wait for or do not qualify for conventional banking approvals, you can apply for hard money loans. The loan application is very simple and quick. Hard money lenders typically take one to two days and may even be approved the same day.

Magna Capital Group, Inc. provides private money financing on residential and commercial properties of all types throughout California. With over 35 years of experience in the real estate industry, we provide unmatched expertise in customizing a loan structure to meet our client’s specific funding requirements with minimal documentation. If you have any questions about our hard money loan programs, feel free to call us now at (310) 734 4044 or email at info@magnaloans.com.

Six Easy Steps to Get Funded With Hard Money Loans Quickly!

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Category : Hard Money Loans

If you are close to foreclosure or cannot find a traditional lender who will meet your odd financing requirements, you can consider getting a hard money loan. A hard money loan is simply a short-term loan secured by real estate property. Hard money lenders offer loans that traditional financial institutions can’t: they move quickly and lend based on collateral instead of credit scores. The loan terms are usually around 6 to 12 months and can be borrowed on almost any type of property including single-family residential, multi-family residential, commercial, land, and industrial.

If you have sufficient equity in your property and need fund quickly, follow these 6 easy steps to get a hard money loan easily and quickly:

1. Find A Local Hard Money Lender:
Find trusted hard money lenders like Magna Capital Group, Inc. who lend money in your locality. You can Google it or visit a local real estate network and get referrals from real estate professionals about a local money lender. Magna Capital Group, Inc. is a leading hard money lender in California, provides hassle-free equity-based private and hard money loans for residential and commercial properties. For more information, you can call at (310) 734 4044 or email at info@magnaloans.com.

2. Interview Selected Hard Money Lenders:
This is the second important step after getting some hard money lenders in your locality. You can call each hard money lender to begin the interview. Go through a brief conversation with them to understand each strategy properly. Here are some important questions that you can ask hard money lenders in order to choose the best one:
a) how much experience do you have?
b) are you a licensed lender?
c) can you show me your references?
d) how do you fix your interest rate?
e) how fast you can approve my loan application?
f) how much LTV can you offer?
g) what types of loans do you offer?
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.

3. Select A Lender And Apply For The Loan:
On the basis of your interview, you can select one of the best hard money lenders from your list and submit your loan application. The process of a hard money loan is very quick and easy. You have to fill a short personal financial statement about yourself, liabilities, expenses, income, assets, subject property and employment. It will take few minutes to apply for a hard money loan.

4. Sign Disclosures:
After submitting your loan application you need to sign disclosures. E-sign consent is the primary disclosure. Permission is given to the money lender so they can send documents to you through the mail. You have to follow the privacy policy, fair lending notice, hazard insurance disclosure and mortgage disclosure statement to apply for the loan.

5. Sign Loans Documents:
The loan documents will only be ready when you will sign the disclosures. There are certain things that make up the loan documents –
• Payment Guarantee
• Note
• Escrow Instructions
• Deed of Trust
• Arbitration Agreement

6. Wire Down Payment:
After signing all the documents, you will be asked to pay down payment. Once it is confirmed by the escrow that your hard money lender has received all the documents then the loan will be funded to you.

The Bottle Line:
If you are a real estate investor with great buying opportunity but cannot get fund from anywhere, you can apply for hard money loans to secure the financing you need. These six simple steps can help you to get your hard money loan approved quickly and smoothly.

A private hard money lender like Magna Capital Group, Inc. can fund quickly within a flexible structure and without prepayment penalties that can unintentionally hinder the success of your business. For more information about hard money loan or our loan programs, please feel free to us at (310) 734 4044 or Email at info@magnaloans.com.

4 Best Financing Options For Fix and Flip Business!

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Category : Fix & Flip Loans , Hard Money Loans

House flipping is a type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. A fix and flip is an excellent way to quickly make money from real estate, and with wise decisions, can be a long-term investment or retirement strategy. A lot of people dream of getting into the business of fixing and flipping houses, but funding is the number one obstacle. You need capital to purchase homes and cover the cost of renovations before you can flip them for a profit.

House Flipping is not just a matter of buying a house and selling it for a profit, but also there are so many costs involved. For examples:

  • The purchase price of the house.
  • Rehab costs.
  • Appraisals and inspections carried out on the property (for example for beetles, pests or foundation inspections).
  • Holding costs, realtor fees, and closing costs.
  • Loan interest and fees.
  • Down payments on loans.

If you’re thinking about flipping, you’re probably looking to acquire an investment property and then fix it up to sell at a higher price. If so, here are four top financing options to help you get started:

1. Get A Hard Money Loan: Hard money loans are the best financing option for novices or borrowers with a bad credit score. Hard money lenders can get you funds quickly to buy the house that you will flip as well as pay for any of the costs. Loan approval of a hard money loan is far easier than obtaining a more traditional loan. Hard money loans usually have terms of less than one year and interest rates of 12% to 18%, plus two to five points. Hard money lenders can finance up to 65% of the home’s ARV or after-repair value, which is what you think the house will be worth once the renovations are done.

2. Cash Out Refinance: Its best for the fix and flip investors who have significant equity in an existing investment property or primary residence, but not for those who are just getting started, or for those who still need a bit of extra funding on top of what comes from the cash out refinance.

3. Home Equity Line of Credit: A home equity line of credit is basically taking out a second mortgage as you will also be repaying it over a fixed term, often with a fixed rate of interest. It’s one the best financing option for those flippers who already own a home. Keep in mind, if you do choose this financing option, your home will act as collateral. You risk foreclosure and the loss of your house if you do fall behind in payment. However, if you are confident in your ability to flip a house, it could give you the capital you need to jump-start a new stream of revenue.

4. Conventional Bank Loan: Conventional bank loan is an another financing option that you may opt. Bank pays for the property and you pay the mortgage payments until the house is rehabbed and sold. Its best for experienced flippers who have a great credit score, capital on hand, and significant collateral. For a conventional bank loan, you will have to provide around a 20 to 30 percent down payment of the purchase price on the house you intend to flip. They will also need to know what you intend to use the money for. A traditional money lender may outright refuse to fund it if there are health and safety issues at play. While you intend to fix these issues to flip the home, a traditional money lender generally prefers to fund homes that are already fixed up and livable.

Find the Right Financing Option For You:
If you need capital to flip houses, these are 4 top financing options for flipping houses that you can use to acquire as many properties as you want. Out of these 4 fix and flip funding options, the best one for you depends on the type and condition of the property, your experience with real estate investment, and your personal financial situation. If you are beginner or borrower with bad credit score then hard money loans would be the easiest and fastest financing option you.

To get started on your fix and flip quickly, with most of the funding you need, contact Magna Capital Group, Inc. today to discuss your options. We provide hard money loans at very competitive rates with fast approval and funding. We have proven to be reliable fix and flip lenders and earned many satisfied repeat customers. For more information about loan programs, call us now at (310) 734 4044 or email at info@magnaloans.com.

10 Important Things You Should Know About Hard Money Loans!

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Category : Hard Money Loans

A hard money loan is a type of quick financing secured by a property. Real estate investors have long used hard money loans to finance their real estate investments for reasons of speed and flexibility. But for those who have never taken out a non-traditional loan before, here are 10 important things they should know about hard money loans:

1. Process for Hard Money Loans:
Hard Money Loans provide Investors access to capital to purchase investment properties. The application for a hard money loan is very simple. Hard money lenders typically take one to two days and may even be approved the same day. Hard Money is available for adequately collateralized loans on single-family residential houses and other Real Property including commercial projects. The simplicity and straightforwardness of a hard money loan has made it a popular choice for real estate investors and house flippers.

2. Interest Rate:
The interest rate for hard money loans varies from lender to lender. Usually interest rate ranges from 10% to 18% interest only annual interest rate payable monthly in most cases. Some Lenders will defer interest payments to payoff, benefiting investors that do not want payments during rehab.

3. Loan-to-Value (LTV):
Hard money loans are backed by the value of the property, not by the credit worthiness of the borrower. With a hard money loan, a borrower can borrow 65-75% of the property value. With most hard money lenders, the loan to value is determined through either an appraisal or a broker opinion of value.

4. Loan Terms:
A hard money loan is simply a short-term loan secured by real estate. The loan terms are usually around 12 months depending on the Lender and your needs, but the loan term can be extended to longer terms of 2-5 years. Longer the term can lead to increased costs or interest rate.

5. Loan Costs:
The costs will vary based on the loan amount. All loans will require title policy, insurance, and appraisal. These services come with fees that can range from a few hundred to a couple of thousand dollars. Most require origination points ranging from 2 to 10 points.

6. Credit Scores:
Credit Scores are considered but lenders set their own criteria for “acceptable credit” and will be more receptive to “common sense” credit review. Private Money Lenders look more at the situation and the cause of the credit flaws and rely on the collateral and higher points and rate to mitigate risk.

7. Hard Money Loans for Repairs:
Yes, hard money loans can opt for repairs also. Most hard money lenders require a draw request form to be filled out to identify the completed repairs to the property, copies of the invoices from the contractors or sub-contractors. After work is inspected, draws can be dispersed. Typically work is not paid in advanced.

8. Down Payments:
In most cases, you need to put money down. Lenders want to ensure that you have enough resources to finish the repairs and cover the costs of the loan plus any surprises. Therefore, most hard money lenders require that origination/discount points and other required items be paid at or before closing. They are confident that if you cannot afford to close you typically cannot afford to take out this type of loan.

9. 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, but private hard money lenders are fully invested in your success and typically structure loans without prepayment penalties or added fees.

10. Loan Flexibility:
Hard money lenders are flexible can structure repayment and collateral release terms in ways that are mutually beneficial to both borrower and lender. They always believe greater flexibility often results in better outcomes.

The Bottom Line:
If you need fast access to capital for real estate investments then hard money loans are great option for you. Hard money loans can be obtained faster and easier than a conventional loan and while in almost all cases the amount you can borrow from a private lender exceeds the amount you can qualify for from a convention lender the cost difference is minimal.

Magna Capital Group, Inc. is one of the leading hard money lenders in California. Through our global network of relationships, we identify and implement a wide range of real estate and financial transactions. We have extensive experience in placing conventional & private money financing on residential and commercial properties of all types. If you are considering for a hard money loan, please feel free to contact us today at (310) 734 4044 or Email at info@magnaloans.com.

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