hard money lenders – Page 2 – Hard Money

August 20, 2014
Shawn Molem
0

Why do you need hard money lenders while investing?

Tags : hard money lenders real estate investors

You need to have sufficient amount of money to buy the property of your choice. If you have sufficient cash flow, it becomes much easier for you to act quickly in case a good deal pops up. Above all having a hard money lender by your side makes your work easier, this improves your credibility as an investor.

There are many reasons why most of the real estate investors choose hard money lenders for help. One of these reasons is that these private lenders are not bothered about the borrower’s credit history or financial status. An investor can still borrow money from these non-traditional financiers even if they have poor credit scores.

The other reason why the real estate investors prefer borrowing money from hard money lenders is that they can obtain coverage for a property’s repair cost. It is interesting to know that why these lenders are willing to risk their money on the borrowers who were probably turned down by banks and other leading institutions. Basically, hard money loans are based on the benefits it offers to the lenders.

It means the value of a property, for which the loan is being given, has priority over a borrower’s credit score. As long as your property has a high after repair value, the lenders will approve a loan application, regardless if the borrowers are capable of quickly paying back the mortgage or not.

The other reason why the real estate investors choose to borrow funds from hard money lenders is that they can obtain coverage for a property’s repair cost.

A positive selling point of hard money loans is that the funds can be released immediately. A bank needs about a month to decide on a loan eligibility, but a private lender can approve a loan application in less than a week.

Hard money lenders can be real estate investor’s best friend. This is the reason why an investor should cultivate good relationships with these financiers.

July 14, 2014
Shawn Molem
0

Top Reasons Why Hard Money Lenders Are Considered By More And More Investors

Tags : hard money lender hard money lenders

Category : Buying & Selling Tips

Hard money lenders have turned out to be the most reliable providers of financing in the real estate industry.

All types of real estate investors today avoid bank loans and look for an alternative option in place of this. Bank loans have a complicated application process and hence turned out to be strenuous every time. The hard money lenders are willing to work and provide you the financial services as per your requirement, where you don’t need to worry about paying huge down payments and monthly payments. The rehab money lenders can help you to get the cast without paying much attention on the value of real estate that you are planning to invest in. Once you have purchased the property you can get it renovated and sell it. Once you are finished with selling part, you can pay back the hard money lender plus you can also keep all the profit that you have made off of the property.

The process with hard money lenders is less complicated:

Choosing a Hard Money lender instead of choosing a bank can be a better option if you want this process to be stress free. You just don’t have to worry about all the intricate aspects that a getting a loan involves. Applying for a loan is not an easy process to go for rather it is very difficult and time consuming. Choose going with a hard money lender and get what you need without complications.

Why do you need a hard money lender?

Hard money lenders hardly ever require as much money down as banks do. They make it much easier for you to get the money as compared to the complicated process requires in the banks. The Hard money lenders provide money to their customers by requiring less down as they want to make it more affordable for the customers to choose them instead of going with the banks. There are times when you do not have as much cash as the banks demand for in in such cases you won’t be able to invest unless you find a hard money lender.

December 18, 2012
Shawn Molem
-

Direct Hard Money Lenders – How to Calculate an Offer Price of a Property?

Tags : direct hard money hard money lenders price repair costs purchase price repair repair costs repair costs offer

Category : Hard Money Loans , Real Estate Loans

We receive a lot of queries related to the purchase price, repair costs and offer price of the properties. People want to know the calculation process used by direct hard money lenders for making an offer because it is a known fact that hard money lenders only lend 70%of market value after the repairs have been completed on a property.

First and foremost, you need to realize that the offer price and repair costs are two separate containers of money.

Lenders can fund you up to 100% of both of these containers but both of them should be equal or less than 70% of ARV (after repair value).

This doesn’t mean that you’ll get all the money together for closing the deal.

You will get a particular amount of money for purchasing the property at closing table and the repair money will be deposited into an escrow account after the deal is closed by a hard money lender.

If you are in a perfect situation, you won’t have to add any money as repair costs into the offer.

Let me explain this in detail.

It is very important to figure out what kind of repairs you are willing to do and get an estimate. After that you should determine the ARV. You need to take 70% of after repair value and subtract the repair costs.

This is the maximum amount which you’ll get as an offer and still get financing for the purchase price and repair costs.

On the other hand, you need to be very careful while estimating the repair costs and ARV.

But you need to keep in mind that the final amount of ARV and repair costs would be based upon what have been finalized by direct hard money lenders, not you.

This is usually quite different from the calculations of an investor.

The lenders usually hire the services of two different property evaluators to determine the ARV and repair costs. Both of them send more than a dozen comps after evaluating the property.

This is an extremely efficient system for determining the ARV and repairs, which is followed by few lenders like us.

So, if you are fine with putting some money down or invest in repair costs of the property, you can amend the offer price.

Another important thing, which you should keep in your mind, is the fees that are due during loan closing because direct hard money lenders will not finance that. This would be between 4-6% of the total loan amount and you’ll have to pay it from your own pocket.

The crux of the story is that you’ll have to work on several different offers before you get the numbers that make sense.

But it’s a surety that whenever you’ll find the perfect property, it would be worthy of all your time and efforts!

November 20, 2012
Shawn Molem
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Hard Money Loan – How to Get It?

Tags : finding hard money getting hard money hard money lender hard money lenders hard money loans price rehab costs purchase price rehab

Category : Hard Money Loans , Real Estate Loans

Believe it or not but getting hard money loans are very easy – IF you know where to find it. The easiest way of finding hard money lenders is through web.

It is important to realize that there are many companies, which claim to be a hard money lender but they aren’t in a true sense.

The reason behind getting hard money easily is because you don’t need to go through the conventional requirements of showing your credentials, such as job or credit history. Hard money loans are ONLY given on the basis of property you are buying.

That’s why, it is better to stay away from the places which will ask for a credit score requirement or bank statement before qualifying for the loan.

All the lenders will check your credit report or documents at some point of time but true lenders will only evaluate it to determine your interest rate, origination points and the duration of loan.

Another place to look for a hard money lender is your local REI (Real Estate Investment) club. You can talk to the other investors and find out whose services they are using.

OK, so I have given you some tips here about finding a hard money lender. Now, I would like to answer the main question.

Getting a loan is absolutely different from getting a traditional mortgage for your personal residence. You can only apply for loan after you have taken the property under contract that you are willing to buy.

True lenders work really fast and they can fund you within 7 business days as well but they can’t tell you the exact loan amount, until you show them the property.

As long as you haven’t faced bankruptcy in the last 24 months or you don’t have any current tax liens, you could easily get a hard money loan.

Few things which acts as a hurdle for those who submit their first application are:

1) The amount of loan you’ll get from a lender would be different from what you need.

Hard money lenders usually lend up to 70% of the estimated ARV (After Repair Value) for the property and this amount could be used for purchasing and rehabbing the property.

They will send independent property evaluators who will determine the ARV. A real lender will consider at least 10 comps before finalizing an ARV for the property you want to invest in.

This could be a bit different then what you have expected. If your purchase price and rehab costs are more than the 70% ARV, then you will have to bridge the difference yourself.

This is the biggest mistake which investors make. They think that if a lender is advertising that they will finance 100% of the purchase price and rehab costs, then it would work every time.

But that’s NOT the case. For getting 100% financing, you need to have your purchase price and rehab costs within 70% of ARV.

2) No proper planning for loan fees or origination points.

Hard money lenders are paid on loan points. There’s no other way out. They can’t fund you for points and it is usually of 00.

The borrower will have to pay for those points at the closing table if they want funding.

Even if a lender is advertising “no money down”, they are basically talking about the loan, which doesn’t include points.

October 25, 2012
Shawn Molem
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Hard Money Lenders – The Secret of Successful Funding!

Tags : fix flip investing flip investing flip investing private hard money hard money lenders investing private hard money lenders private hard private hard money real estate real estate investor residential hard residential hard money rules regulations suitable real estate

Category : Home Loan , Real Estate Loans

Actually, only a small number of lenders truly understands the whole concept of fix and flip investing and these private hard money lenders are categorized into the following five basic types:

1. Residential lenders

2. Commercial lenders

3. Bridge lenders

4. High end lenders

5. Development lenders

Amongst these five different types of lenders, you need to find out which lender is going to be suitable for your real estate investment. Generally people start by investing into a single family home, that’s why they choose residential hard money lenders.

But the basic difference between the lenders depends upon the source of funds. That’s why; they can be easily categorized into bank lenders and private hard money lenders.

Bank Type Lenders – If you are working with a lender who is providing you funding with the help of some financial institutions, where they will sell or leverage your paper to the Wall Street in order to get you money. These types of lenders will be following some rules and regulations specified by the banks or Wall Street.

That’s why, in order to get the loan, you need to follow these rules and regulations, which isn’t suitable for a real estate investor interested in doing fix and flip investing.

Private hard money lenders – These are the lenders who work on private basis. They usually work in a group of private lenders, who likes to lend money regularly. Their best quality is that they do not sell their paper to any financial institution or bank. They have particular rules and regulations, which are made to help a real estate investor.

Private Lenders That Are into Fix and Flip – You can easily find residential hard money lenders, who are really into fix and flip loans. Most of the real estate investors find it quite difficult to get financing for buying a property, which they have taken under contract.

And when they finally a good property and contact a lender for funding, their loans can get rejected on the basis of some neighborhood problems. Then the investor look for another property but the lender couldn’t fund them because of market depreciation.

In this way, an investor is always looking for properties. But some lenders don’t have enough money to fund their deal, whereas others are continuously increasing their interest rates, which can’t be afforded. Apart from all these issues, you can find lenders who are willing to lend money on fix and flip properties.

These lenders also have certain rules and regulations like a typical bank or financial institution but they are designed to work in favor for the real estate investor.

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Why do you need hard money lenders while investing?

0

Why do you need hard money lenders while investing?

0

Top Reasons Why Hard Money Lenders Are Considered By More And More Investors

-

Direct Hard Money Lenders – How to Calculate an Offer Price of a Property?

-

Hard Money Loan – How to Get It?

-

Hard Money Lenders – The Secret of Successful Funding!

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