How to Spot Hard Money Lenders
Author: Daniel Mc Grey
Author: Daniel Mc Grey
Completing a
real estate investing project can be a difficult thing to do if you dont have sufficient cash. And if you dont have a good credit score, it would be much harder for you to see the project through because banks and other institutionalized lenders are likely to reject your loan application. Fortunately,
hard money lenders are willing to overlook such technicality and provide you with the financial assistance you need. The reason for this is that hard money loans are asset-based. It means that a lender bases his decision to approve or reject a loan application on the collateralized propertys after repair value. So if the collateralized property can fetch a good price after all the necessary repairs and renovations have been carried out, then the money will come to the deal. To find hard money lenders, heres what you should do: Surf the Internet most lenders of hard money loans use the power of technology to advertise their services. Unlike banks, mortgage companies, credit unions, and other traditional lenders, these creative financiers dont have storefront offices nor do they attract clients by using neon signs. Therefore, your best tool to finding them is the Internet. Ask for referrals another great way to find hard money lenders is to ask the people you know for referrals. Your colleagues in the real estate investing business can point you to the right direction because most of them have already experienced working with these non-traditional financiers. Talk to accountants and settlement attorneys these people are great sources of names because they are the ones who prepare loan documents and other finance-related work for these financers. Be warned, however, that unlike in traditional bank loans, the interest rates that come with hard money loans are relatively higher. Rates usually fall between 12% and 18%. In addition, most hard money lenders ask for additional origination fees. Origination fees, by the way, are used to process a loan application. In addition, terms may vary from one lender to another. Some lenders of hard money may require you to submit simple financial documents, such as W-2s, while some of them may opt to conduct an ocular inspection on the property for which the loan is being made. But despite all these disadvantages, it is still better to use hard money loans to finance areal estate investing project than to spend your personal savings. If you want to learn more abouthard money lending, visit
www.Rehab-Real-Estate.com.About the Author:
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