Hard Money Loans

Ever tried rehabbing houses without sufficient funds? It’s tough, isn’t it? You can’t act quickly. You also have to be mindful of how you spend your budget because if you don’t, you’ll end up with a property with incomplete repairs and renovations.

This is the reason why many real estate investors sign up for the services of rehab hard money lenders. These non-traditional financiers can help them complete a fix and flip project by providing them with the funds needed to buy a fixer upper home, as well as the construction materials and other supplies.

So why hard money loans instead of conventional mortgages? We are all aware that time is important for many real estate investors and if they borrow money from banks and traditional lenders, they will lose a great deal of time just by waiting for the results of their loan applications. When it comes to hard money lending, however, there is a much shorter turnaround time for a loan to be approved. This allows rehabbers to immediately buy the property they want to fix and flip.

The reason why rehab hard money lenders can easily approve a loan application is that they don’t require their borrowers to undergo a credit check or to submit reams of paperwork. To verify the eligibility of a loan application, these non-traditional financiers conduct an appraisal or an onsite inspection on the property for which an investor is borrowing money for.  If they feel that the property has a high after repair value and that the borrower will generate huge profits after fixing and flipping the real estate, they will release the required funds, no questions asked.

A downside of borrowing from rehab hard money lenders, however, is that a real estate investor is required to pay interest rates of up to 18%. The loan-to-value ratio of hard money loans, on the other hand, is usually 65% so if a collateralized property is assessed to be worth $100,000, a real estate investor can only advance at least $65,000.

Another disadvantage of using hard money loans to fund a rehab project is that acquiring them can be expensive. Hard money lenders usually ask for origination fees before they process your loan application. In addition, terms may vary from one lender to another.

But if are you keen on completing a rehab project, borrowing hard money loans from rehab hard money lenders is your best bet. To find the non-traditional best lender in your area, visit www.RehabHardMoney.com.

While it is true that Florida’s housing market has been in the doldrums over the last few years, it doesn’t necessarily meant that there’s no hope left for a real estate investor like you. There are still lots of opportunities waiting for you in the Sunshine State and if you’re having trouble finding a good source of funds for your real estate investments, you can always rely on lenders of Florida hard money.

Unlike traditional lending institutions such as banks and mortgage companies, local hard money lenders are not primarily concerned with your credit score. So if you want to borrow money for a real estate investment in Miami or in Coral Springs, you don’t have to hesitate anymore because these non-traditional financiers can help get the job done.

Hard money loans are asset-based and lenders look into the collateralized property’s after repair value to verify a loan’s eligibility. The higher the value of the property, the bigger a borrower’s chance of securing the funds he or she needs.

One of the best things about obtaining the assistance of Florida hard money lenders is that you don’t have to wait a long time just to determine the results of your loan application. Because hard money loans are asset-based, lenders don’t require credit checks and a lengthy underwriting process. They can quickly decide if a loan application is worth their time or not by simply doing an appraisal on the property that you wish to borrow money for and studying simple financial documents.

Because of the speed in which hard money lenders process your loan application, you can act quickly and take advantage of the opportunities that come your way. You can easily outsmart other real estate investors who want to purchase the same investment property that you want to buy. With hard money, you can make your life as a real estate investor much easier.

Using hard money, however, has its advantages, too. Securing this type of financing is more expensive than qualifying for a bank loan. It has higher interest rates and lenders ask for additional origination fees before they can process your loan application. But if you’re willing to put up with such minor drawbacks, Florida hard money can give your real estate investing a huge boost.

If you’re looking for a good source of hard money loans in the Sunshine State of Florida, simply log in to www.RehabHardMoney.com. The website can help you find a reliable hard money lender in your area.

Private hard money is one of best yet often misunderstood tools in a real estate investor’s toolbox. If used properly, it can propel you to riches. It can also help you make the most of good money-making opportunities that land on your doorstep.

As the name implies, hard money is a type of asset-based financing offered by private individuals and small lending institutions rather than institutionalized financiers such as banks, mortgage companies, and credit unions. Hard money loans are made on the basis of the after repair value (ARV) of the collateralized property as opposed to conventional lending standards.

Advantages of using hard money loans

According to experts, hard money lending is the perfect financing solution for your real estate investments. It makes investing in real estate much easier because:

Most hard money lenders don’t require credit checks. Like what was mentioned earlier, a lender looks into the value of the property to verify a loan’s eligibility. That being said, a real estate investor can secure funding for a real estate project regardless of his or her credit score.
Lenders can quickly decide if the loan application is worth their time or not. As compared to traditional financing, hard money lending has a shorter underwriting process. Because it involves less red tape and doesn’t require credit checks, a real estate investor doesn’t have to waste a lot of time waiting for the results of his or her loan application.
Private hard money allows real estate investors to act quickly. Because it doesn’t take too much time to process an application for a hard money loan, a real estate entrepreneur can quickly get the funds he needs to buy the investment property that he wants. With a great deal of ready money in hand, an investor can easily beat the competition.
At times, a real estate investor doesn’t have to pay for the repairs on the collateralized property. Hard money loans have a loan-to-value ratio of about 65%. Let’s say you’re going to buy a $40,000-handyman special that has a $100,000 ARV. You’ll get $65,000 from the lender and spend $40,000 for the purchase of the property. You’ll have $25,000 left, which you can use to pay for the property’s repair and maintenance.

If you’re having trouble securing financing for your real estate investments, you should use private hard money. To find a good source of hard money in your area, visit www.RehabHardMoney.com.

Thanks to hard money lenders, acquiring funds for you real estate investing business has never been this easy. Because negotiating with these individuals is a breeze, you can get the cash that you need in a flash.

The loans provided by these lenders are called hard money. Contrary to its negative-sounding name, a hard money loan, or HML, is easier to obtain because it is asset-based. Lenders of hard money approve or reject a loan application based on the value of a property for which the loan is being made.

Because of such a scenario, a real estate investor can still secure financing for his investment properties despite his low credit score. Hard money lenders are not basically concerned about a borrower’s credit history. As long as the property, which is being offered as collateral, has a high after repair value (ARV) and the potential to attract a good deal, they will approve an investor’s loan application.

Another advantage of acquiring hard money loans is that the funds can be released in a day or two. Unlike when negotiating with traditional lending institutions such as banks, credit unions, and mortgage companies, you don’t have to deal with a processing team or panel when borrowing funds from hard money lenders. Some of them may ask for simple financial documents like tax returns or W-2s, while some lenders may visit the property for an appraisal. This won’t take long because some lenders were able to approve a loan application within 24 hours.

A real estate investor who rehab properties for a living will greatly benefit from dealing with hard money lenders. It is because hard money loans provide coverage for the repair cost of a property, allowing rehabbers to transform a handy special into an exquisite property fit for royalty. In addition, some lenders will provide 100% financing on some deals.

However, a known disadvantage of securing hard money loans is that interest rates are relatively higher compared to the loans offered by traditional lenders. Some lenders of hard money also ask for high origination fees, which are used to process a loan application. But despite these disadvantages, it is still advisable for a real estate investor to secure hard money loans when buying investment properties.

Meanwhile, if you want to know everything about hard money, log on to REIWired.com. The website features quality articles, audio files, and videos on hard money lending and real estate investing.

As a real estate investor, it is important to have a steady source of funds. This will help ensure that you will be able to buy the investment properties of your choice. Good thing hard money lenders can provide you with all the financing you need to make sure that you will succeed in your chosen business.

Lenders of hard money are usually private lenders or small lending institutions that offer a specialized type of asset-based loan. Their clients usually include real estate investors and borrowers who don’t have acceptable credit or the necessary papers used in processing a loan application.

Unlike their traditional counterparts, which include banks, credit unions, and mortgage companies, hard money lenders are not primarily concerned with a borrower’s credit history. It is because a hard money loan is a type of creative financing wherein a loan’s eligibility is verified by assessing the after repair value, or ARV, of a property that is being offered as collateral. As long as the property has great potential, lenders of hard money will provide the needed funds.

Most hard money lenders do not ask borrowers to submit necessary documentation or perform credit checks. However, there are some who want to find out a client’s credit history to protect their interest. But for the most part, these lenders based their decision to approve or reject a loan application on the value of the property for which the loan is being made so they might want to inspect the house you want to invest in.

Hard money loans usually cover the repair cost of a property. Such a scenario can be a big help to a real estate investor who rehab homes for a living because he can renovate an investment property without spending a single dollar up front. In addition, these loans can be released in just a matter of days, which is why dealing with lenders of hard money is ideal for those who are in need of quick financing.

Interest rates, meanwhile, vary from one lender to another. They usually range from 13% to 18%, which are considerably higher than the rates on bank loans. In addition, some hard money lenders ask for origination fees, or the fees used to process a loan application.

When applying for hard money loans, having a background on hard money lending will surely help. This is the reason why you have to make sure that you have done your homework first before approaching lenders of hard money. So if you want to boost your knowledge of hard money lending and real estate investing, visit REIWired.com, your best source of quality real estate write-ups, audio files, and videos.

Investing in real estate is one good way to make a living for you and your family. However, to earn big profits, you also have to spend a considerable amount of money in this business. This is why you have to secure a good source of funds if you want to become a real estate investor.

Banks, credit unions, and mortgage companies can provide you the funds you need. However, if you have a bad credit history, it would be difficult for you to obtain a loan from these traditional lenders. Fortunately, hard money lenders provide alternative financing for those who can’t secure a bank loan.

The loans provided by these non-traditional lenders are called hard money loans. Such loans are perfect for buying investment properties because they are asset-based. When it comes to hard money loans, lenders verify a loan’s eligibility by assessing the value of the collateralized property after it is repaired. Basically, it means that lenders of hard money do not care about a borrower’s credit history. As long as the investment property has high after repair value, or ARV, they will approve the loan application.

Hard money lenders are usually private individuals who have a huge amount of cash on hand. They can also be small lending institutions that are willing to lend money for investment purposes. Most lenders of hard money have their own set of criteria when approving or rejecting a loan application. While some of them may not ask for documentation or credit checks, there are some who require their borrowers to submit simple credentials such as W-2s and tax returns.

The terms for hard money loans vary from one lender to another. Usually, these lenders offer a loan to value (LTV) ratio of 60% to 70% of the after repair value of a property and the payment period is mostly from three months to one year. Hard money also has higher interest rates compared to traditional loans, with rates ranging from 12% to 18%. In addition, some lenders may ask for higher origination fees, which are used to process a loan application, as a way of protecting their interest.

Despite these minor setbacks, it is still better for a real estate investor to obtain hard money loans.  It is because he can secure funds in a flash since most lenders of hard money can approve a loan application in just a matter of days. In addition an investor doesn’t have to deal with a handful of people because he doesn’t have to negotiate with a processing panel.

Meanwhile, if you want to learn more about the benefits of seeking the assistance of hard money lenders for your investing business, visit www.REIWired.com, where you can browse quality articles and videos on real estate investing and hard money lending.

Seeking the assistance of hard money lenders is a must for a real estate investor. Because these non-traditional financiers can give investors an access to fast cash, it would be easier for the latter to obtain great investment properties and close good deals. They also provide alternative financing for those who don’t qualify for a bank loan.

The loans offered by these lenders are called hard money. Hard money loans are asset-based, meaning the lenders based their decision to approve or reject a loan application on the after repair value of the collateralized property. Because of this particular setup, asking hard money lenders for help has more advantages than applying for traditional banks loans. Some of these added benefits are listed below:

Negotiating with lenders of hard money is easier because you don’t have to deal with a processing panel, which will make you wait for months only to reject your loan application. In addition, you don’t have to wait at long lines just to talk to the person in charge since most of these non-traditional lenders can be accessible anytime. Because hard money loans are asset-based, you can still borrow money from lenders of such loans even if you have a poor credit rating. As long as you can prove to these private lenders that the collateralized property is worth their time and money, then they will provide you with the funds you need. When asking hard money lenders for help, you don’t have to procure tons of documents and submit other credentials that will prove your creditworthiness. Thus, you can use your energy on finding good deals, instead of spending most of your time doing such tedious tasks. Unlike the type of financing offered by banks and other institutionalized lending companies, hard money loans can be released immediately. You don’t have to wait weeks or months just to determine the results of your loan application as most lenders can verify a loan’s eligibility in less than a week. Some of them can even grant a loan within 24 hours upon the receipt of the needed documents.

If you are a real estate investor who is looking for a good source of funds for your investment properties, then you should definitely seek the assistance of hard money lenders. To learn more about hard money lending, you can visit www.Rehablist.com. The website is home to quality articles and videos on all topics related to real estate investing.

More hard money lenders are in demand than ever as the number of real estate investors who require their assistance continue to grow. Because they provide the best financing alternative to bank loans and traditional mortgages, many entrepreneurs are keen on borrowing funds from them.

Hard money loans, which are the funds offered by these creative lenders, are easier to obtain. It is because they are asset-based and hard money lenders look into a collateralized property’s after repair value or ARV when assessing a loan application.

Because of this, a borrower doesn’t have to undergo tedious credit checks and face a processing team just to qualify for a loan. Thus, it allows a real estate investor to use his time on other important matters, such as finding the next deal. Aside from this particular advantage of hard money lending, this type of non-traditional financing can bring more benefits to real estate investors.

Listed below are some of them:

1.       Because hard money loans are asset-based, hard money lenders are not interested in your creditworthiness. Therefore, you can still borrow money from them even if you have a bad credit rating.

2.       Lenders of hard money can process a loan application in just a few days, with some of them doing it within a 24-hour period. As soon as they are finished appraising the property for which the loan is being made or reviewing simple financial documents that you have submitted, you can quickly find out if your application got approved or rejected.

3.       Some lenders don’t require you to submit credentials so you don’t have to dig up piles of documents just to make a loan. In addition, you can easily talk to these financiers, unlike their traditional counterparts.

4.       You can rake in huge profits without spending money from your own pockets. Some hard money lenders are willing to finance the repair cost of a property, a set-up that would mostly benefit those who rehab fixer upper homes for a living. In addition, some lenders can provide 100% financing on some deals so you can generate income without spending money up front. However, a downside of using hard money loans to finance a real estate project is that interest rates are relatively higher. In addition, lenders may ask for origination fees, which are used to process a loan application.

Terms also vary from one lender to another so it would be wise to have a background on hard money lending before borrowing hard money. Meanwhile, you can find more details on hard money lenders on www.Rehab-Real-Estate.com.

Hard Money is an interesting financial animal. Its
history is colorful to say the least. Born by the need
for rehabbers to get access to funds when a property is
in disrepair and which no bank would lend on, it has grown to a
multi-billion dollar industry.

The early lenders were ex-real estate investors who had
made a few dollars in real estate and then became
lenders in their local area. Now the industry is rapidly
moving toward larger financial institutions and even
larger banks.

As a newer real estate investor, becoming familiar with
how to work with hard money can be one of the most
profitable things you can do early on. This is truly the
information business. If you are able to secure a contract
on a single family home (non-owner occupied) you may
be able to borrow 100% of the purchase costs and even
some or all of the fix up money and closing costs.

One of the most important, but often overlooked, benefits
of working with a hard money lender like this is that someone
with a vested interest in your success has agreed, by virtue of
approving the loan, that you have a real deal.
This can be such a huge bonus for the new person. It can force
you to do your homework when contracting properties to buy.

Honestly properties that fit into the hard money parameters are
some of the best real estate deals out there. So if you get a
property approved for a hard money loan congratulate yourself!

Some of the specifics you need to keep in mind when shopping
for hard money are:

ARV

ARV stands for after repaired value. This number is
important because the amount of money you can borrow is
derived from what the property will sell for when youre
done with your repairs. So know your values. Know what
completely renovated houses will sell for. Most hard money
loans are based on 60 to 65% of the ARV. That means if you
buy a property that will be worth $100,000 when the repairs
are complete you will be able to borrow up to $65,000 from
the lender. This could possibly even include the repair costs
and closing costs if your contract to purchase is low enough.

I think its important to mention here that some people falsely
believe that it is impossible to buy a house for less than 65%
of what it would be worth fixed up. Remember this did not
become a multi-billion dollar industry because the hard money
lenders arent lending money. It is absolutely possible and done
every day. So get out there and find a house

Interest rate: While this is are rapidly becoming
standardized there is still a lot of fluctuation in interest rate
from lender to lender. Dont get bogged down with the
interest rate. The norm is between 12% and 18% or more in
some states. While this sound preposterous compared to what
a normal home loan interest is think of it as access to
capital. The money will only be out from three to six months
You should look to pay what is now becoming the average
which is 13% to 15%.
But competition is forcing the rates as low as 11%

Points: Heres where you do need to be concerned and do
some shopping. Points vary from two, which is rare, to ten
also rare these days but more common than you would think.
The average these days is in the 4 to 6 point range. Now when
you consider a point is one percent of the total loan amount just
a $100,000 dollar loan could range in fees from $1,000 to TEN
thousand dollars. Now that could cut into your profits.

There are other things to consider when shopping for hard money.
One of the first things you need to check on is the availability of
becoming pre-qualified. Does hard money lender have a process
to get you prequalified for the loan? Also, will they issue a very
important document to you call a proof of funds letter. This is very
important as most banks and Realtors and even some sellers these
days will require proof that you are able to fund the transaction.

Second is the pre-payment penalty. Youll want to look into this.
Most hard money lenders dont have one any more because they
realize the loan is just for a short time, but still – ask the question!
Some actually do have time limits like six months or a year in which
time the loan needs to be re-paid but they usually offer a payment
program to extend the loan longer. First off, you
dont want to have the loan out that long but if you do – you want
to know your options.

Heres the thing. Dont let this process scare you. As Ive stated
above working with a lender like this is a good thing. You do
your part and find a good, undervalued home to put a contract on.
Then work with your lender to get the house approved. Remember
youve already been pre-approved for the loan so use that proof of
funds letter to get your first or next property.

Author: Mike Collins
Article Source: EzineArticles.com

photo credit: stevendamron

I interview real estate investors for my website and recently I came across a number of investors who teach about using private money to purchase real estate. However, if you would have asked me one (1) year ago about the difference between private money and hard money I would not have been able to tell you anything. The difference however is very critical.

Broken down into its simplest form the main difference is with private money you decide the terms of use and with hard money the lender decides the terms of use. Now this very basic difference has a lot of impact on your real estate investing business. One type of money is not necessarily better than the other but you should in fact no the difference.

Where does the money come from?

In both scenarios you are going to receive the money from an outside investor. There are several ways to discover these investors from holding luncheons to running ads in the local paper. The investors know that real estate will offer a higher return than the market so they are inclined to give you some dollar amount in exchange for a percentage of return. Read the rest of this entry »