How to Find Genuine Hard Money Lenders?

How to Find Genuine Hard Money Lenders?

Have you tried all self proclaimed hard money lenders in your town and you are unable to find much difference between the guidelines of these lenders and conventional lenders? Are you in search of a genuine hard money lender, who could fund you in as less than 7 days without much hassle?
If you have answered “yes” to above questions, then you have come to the right place. This article will help you in finding the answers to your questions in an easy way.
Before getting into the discussion zone, let us first deal with the 800 pound gorilla in the room…
So, what are the factors which make a “real” hard money lender company?
There are some basic differences between the so-called and real lenders, which you need to understand first. Apart from that, there are some solid reasons of choosing a true hard money lender over a false one.
Difference #1 – A true hard money lender isn’t interested in your credit history. A real lender will never put a condition that if you don’t have a good credit history, you won’t get financing. There are many hard money lending companies, which will say that they don’t care about your credit but at the end of the day, they’ll say that their minimum credit score requirement is 600.
The reason behind this is these lenders are packaging their loans for Wall Street or banks, so ultimately they’ll have to conform to all the legal requirements set up by these traditional lenders, which can’t be afforded by a person who has a bad credit history.
Difference #2 – On the other hand, a real lender ONLY cares about your collateral you are willing to invest in. They will get your property evaluated by professional independent evaluators, who will look at your property without any preconceive notions. They will give a purchase price, repair cost and estimated after repair value (ARV) of the property to the lender and if they find it good enough, they will fund you there and then.
Whereas, the imposters will put your credit score, job history, salary and other finances at the top of their loan requirements list before offering you a loan, which is exactly same as conventional lenders work.
This shows that there is a huge difference between a real lender and an imposter.

Getting Comfortable with Hard Money Investing

Many real estate investors overlook hard money loans as a strategy for acquiring property. That’s because these loans are typically used by desperate property owners looking for a way out of the real estate market, rather than into it. But hard money can work for anyone, and it can be particularly useful if you’re a new investor looking to build your portfolio quickly.

Hard money loans can generally be described as high interest loans available to borrowers with any credit rating, as long as they can can provide solid collateral – usually equity in real estate, such as a home. These loans are almost never issued by banks or deposit institutions, but rather by private lenders who specialize in short term lending at high interest.
Normally a home owner in need of a big loan would apply for a second mortgage, using real estate equity as collateral, but bad credit can make things difficult here. If a home owner has missed a few mortgage payments, the banks may refuse to provide more financing – hard money might be the only option in this case.
The limit for hard money loans typically hover at about 60 to 70 per cent of a property’s quick sale value, defined as the price a lender could reasonably expect to realize if the borrower defaulted on the loan, and the property was liquidated fast. The interest rate for a hard money loan is usually in the 15 to 25 per cent range.
Investors can take out hard money loans to buy a property, as long as they provide acceptable collateral – in this case it could even be the property they’re buying. The strategy here is to find a pre-foreclosure property, or any real estate with an owner prepared to sell below below market value as long as the sale is fast. If the investor can re-sell the property at full market value, before too much interest is paid on the hard money loan, he or she can make a significant profit. Hard money loans have helped many successful investors get started in real estate.


California Hard Money Lender – The Ideal Solution and Great Source of Fund for your Real Estate Success

Are you into real estate investing but just having the problem maintaining your funds for its success? Are you having the difficulty in getting the loans that you need just when you’re in time of distress? What will you do if you are unsuccessful in getting funds through a conventional source for your real estate investment? An ideal solution is hard money loan.


Hard money loan is a short-term loan that you can use during situations such as acquisitions, turnarounds, foreclosures, and bankruptcies. Hard money loan is an asset-based loan for a short period. It is a very easy loan to obtain as you don’t need to qualify for the loan; it’s your asset that has to qualify. There are several hard money lenders in California who can help you out.


Today, hard money lenders have emerged as a quick access to the money required from private investors. Hard money lender firms provide funding solutions for homeowners, entrepreneurs, and real estate investors. The best thing about these firms is that they provide customized solutions as per your needs and circumstances and that too in a very fast and effective manner. Thus, these firms help you do away with the strict corporate banking policies, which very often lead to missed opportunities. In addition, since it is a private loan, the terms and agreements can be easily negotiated.


People having a bad credit history, no credit, unverifiable income, and those who have faced home foreclosure can seek the help from California hard money lenders. Although they charge a higher rate of interest than traditional mortgage home lenders, they are very prompt and efficient in providing loans in a very hassle-free way.


If you are planning your business in real estate investment in California and you are tired of hearing NO from banks, then don’t waste any more of your time. Go to a California hard money lender but make sure that you have a good plan for paying back the funds. California hard money lenders will give your business a competitive edge by providing quick funding options and hard money very quickly.


As there are several California hard money lenders, it is not very difficult to seek them out. You can look for them in directories. However, you must be careful in choosing the right California hard money lender to ensure your success. Some lenders may charge very high rate of interest and may not be willing to negotiate the terms and agreements. Remember that all hard money lenders are concerned about getting their loan paid back. So, the feasibility of the deal really matters to them. Hard money lenders take risk only because they expect good return.


How to Finance Your Real Estate Investments

Real estate investment is a good way for building wealth. There are many advantages of investing in real estate: portfolio diversification, stable cash inflows, and future appreciation. However, you do not want to use cash to buy houses even you have a full bank account. You may want to use other people’s money to finance your investment in order to buy as many as properties with limited money. Before you can make a real estate investment, you need to understand the most common mortgage types available in the markets:

Conforming loans: A conforming loan is a mortgage that meets the criteria set by Freddie Mac and Fannie Mae. To ensure the money is available for the consumers, Freddie Mac and Fannie Mae purchase the loans from the lenders, issue securities that are backed by these mortgages and sell the securities to the investors. To qualify a conforming loan, the borrower must have verified income, enough cash for down payment and a good credit history. There is also a limit of a conforming loan. A conforming loan limit is the maximum amount of dollars Freddie Mac and Fannie Mae will pay for a mortgage. Conforming limit is not a fixed value, It is set by the office of Federal Housing Enterprise Oversight (OFHEO) according to the average home prices in different areas.

Nonconforming loans, Jumbo loans and Hard money loans: A nonconforming loan is a mortgage that fails to meet the criteria set by Freddie Mac and Fannie Mae. Reasons include the loan amount is higher than the confirming loan limit, lack of verified income and poor credit history. A Jumbo loan is a loan that its amount is higher than the confirming loan limit. Hare money loans also referred to as Bridge loans, they are typically short-term loans with high interest rates. These kinds of funding enable the borrower to obtain funding in a hurry and to get larger and longer-term financing later. Bride loans are frequently used before construction funding are replaced by permanent funding.

Conventional loans: A conventional loan is a mortgage that is not guaranteed or insured by any government agency, including FHA, VA and USDA. Therefore, conventional loans could be either conforming or nonconforming. Conventional loans usually have fixed-rate terms, large down payments and high interest rates. They also have penalties and clauses that federal lending do not have. The advantages of these loans are the loan fees are negotiable, and you can use collateral for a mortgage rather than the property.

Government loan programs: There are two government loan programs: Federal Housing Authority (FHA) and Veterans Administration (VA) loans. They are loans that the government used to support the industry and are usually available for first-time home buyers. The government also offers loans to borrowers to assist in rehabilitating properties. They give borrowers access to funding that banks, and private sectors do not want to provide.


Hard Money Lenders and Regular Mortgage Brokers – How They’re Different

Hard money lenders are just another type of mortgage broker–or are they? Well, yes and no. Following are a few ways in which hard money lenders are actually very different from regular mortgage brokers–and what that can mean for real estate investors.
Private lenders vs. institutions
Regular mortgage brokers work with a number of institutions such as big banks and mortgage companies to arrange mortgages, and make their money on points and certain loan fees. The bank itself tacks on more closing costs and fees, so by the time the closing is over, the borrower has paid anywhere from a few thousand to several thousand dollars in fees, points and other expenses. And the more mortgage brokers are involved, the more points the borrower pays.
Hard money lenders, on the other hand, work directly with private lenders, either individually or as a pool. If the hard money lender works with the private lenders individually, then for each new loan request, the hard money lender must approach each private lender until s/he has raised enough money to fund the loan. The money is then put into escrow until the closing.
Alternatively, instead of approaching private lenders individually for each new loan, the hard money lender may place private money from the private lenders into a pool–with specific criteria about how the money can be used. The hard money lender then uses predetermined terms to decide which new loan requests fit those criteria. The loan servicing company that collects the loan payments pays them directly into the pool, and the pool pays a percentage of those payments back to the private lenders.
Different types of properties–investment vs. owner-occupied
While regular mortgage brokers can work with residential properties or commercial properties, hard money lenders vastly prefer investment properties–also known as “non-owner-occupied” properties (NOO for short). That’s because “owner-occupied” (OO) properties have restrictions on how many points the hard money lender can collect (ex. a maximum of 5 points), and the term must be at least 5 years.
With NOO properties, hard money lenders can charge higher points and fees and offer loans for shorter terms, sometimes even one year or less. While that may seem risky and expensive, the profit from one good “flip” transaction can easily make up for higher loan expenses.
Knowledge of predatory lending laws
Owner-occupied (OO) real estate properties are subject to what are known as predatory lending laws–a set of laws designed to protect consumers, especially the under-educated, minorities and the poor–from unscrupulous and unfair lending practices.
Hard money lenders must be fully knowledgeable of both federal and state predatory lending laws. And private lenders will only work with hard money lenders, because a regular mortgage broker usually is not familiar with predatory lending laws and may make a mistake that gets his license suspended–and may even jeopardize the private lender’s loan.
Saving money with hard money lenders
Now that we’ve discussed some of the differences between hard money lenders and conventional mortgage brokers, you can see some of the reasons for using hard money loans for investment properties that you intend to flip or rehab and resell. Here’s another reason: by dealing with a hard money lender who has direct access to private lenders (rather than several layers of brokers), you may be saving yourself thousands of dollars in points and extra fees.
Furthermore, using a hard money lender can help you quickly obtain the loan you need, with the term you want, and with no risk to your personal credit. And if you can develop the right kind of relationship with the right hard money lender and private lenders, you too can be part of the “inner circle” of real estate investors who seem to find out about all the best deals first–and are building real wealth.


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