Hard Money Lenders | The Real Estate Radio USA Hard Money Lender Directory
April 17, 2008
If you are working in the foreclosure niche of real estate, you know that right now truly is a great time to buy.
In order to really capitalize on this market and to be able to seize the profit opportunities that are afforded the real estate professional, you are going to need a good source of funds. Every real estate agent or investor needs to have a competent hard money lender on speed-dial. We have found that the ability to close quickly on a distressed property can sometimes be the difference between a great payday and no payday at all.
What is a hard money loan? A hard money loan is a loan in which the primary criteria for the loan is the value of the property. It is for the most part, an asset based loan. Hard money loans can be from institutions, credit unions, or private individuals.
Terms
Those who participate in hard money lending do so because they can often command much higher interest rates due to the risk involved. There is no typical hard money loan. As most hard money lenders are lending either their own money or the money of their group, they are able to set their own lending criteria in terms of duration, fees, term, pre-payment penalties, types of properties, and even location where they want to lend.
Credit Score
As many hard money loans are made by private investors, credit requirements vary. Usually the credit score of the borrower is not as important, value of the collateral property. As lending in conventional market has turned quite tight, many hard money lenders are being looked at to step in and help deals get done.
While some hard money lenders may require a certain credit score, others may not.
LTV
As with all other hard money terms, the hard money lender that you work with will set their own LTV. typically, the loan to value ratio is 50-70%. For example, if the hard money lender feels that the property is worth $100,000, they would potentially lend $50,000-70,000 against it. This low LTV provides a good deal of security for the hard money lender, in case the borrower does not pay and they have to foreclose on the property.
As you can see, having relationships with competent hard money lenders will allow you to purchase properties or get your buyers funded for short sales and REO purchases.
We have worked with hard money lenders that can close in as little as 24 hours from receiving clear title. I doubt you will be able to find that kind of turnaround with a bank. As the housing crash has continued, more and more transactions are being funded by hard money lenders.
In fact if you have funds available and want to earn a secure return, becoming a hard money lender may be something you want to look into.
Here are some questions you will want to ask a prospective hard money lender to make sure you get the best deal possible:
1. Where do you lend?
2. What kind of properties will you lend on?
3. What are your credit requirements?
4. What is your turn around time to lend?
5. Will you lend to a LLC
5. Do you require a personal guaranty
6.What is your interest rate?
7. Is it interest only?
8. What is the term of the loan?
9. Is there a pre-payment penalty?
10. Can the loan be extended beyond the stated term?
11. Is the loan assumable if I sell the property?
12. What are the points and fees you charge for making the loan?
13. Can they be rolled into the loan?
14. Do you lend based upon the ARV or the contract price?
15. Will you escrow for repairs?
16. What is your repair escrow disbursement policy?
17. Will you provide a Proof of Funds Letter so that you can buy REO properties and execute your short sales
18. Can I rent out the house or move-in while the loan is outstanding?
If you are serious about working the foreclosure market, or if you want to buy foreclosures, you will need a hard money lender on your team.
There is a lot of money to be made buying and selling foreclosures, REO properties and in executing short sales. Having the money to close quickly can substantially increase your ability to earn huge profits in foreclosures.
We have compiled a list of hard money lenders that you can access by clicking below. While this is a very large list, it is not by all means the COMPLETE list. We will continue to add names of hard money lenders from across the Country. If you are a hard money lender and want to be included on the list please send us an email and we’ll add you to the list.
If you come across a lender on the list who is no longer making loans (we’re in a crazy market) please send us the info so we can keep our hard money lenders directory up to date.
REAL ESTATE RADIO USA HARD MONEY LENDER DIRECTORY
There are many types of hard money loans, if you’re not sure if hard money loans is the right way for you to go try to understand first what is hard money loans?
You can go to my website of course any time to read more about had money lending.
Most loans are done for investment properties non owner occupied.
So if you’re looking for a commercial or residential hard money deal you have to know that the interest rates are higher than conventional lending and the points are like 5 at least for each loan you will apply for.
Let me know if you need more help.
Yanni Raz
First of all I want to make sure that you’re all familiar with the term Hard Money.
Hard Money is Money Loaned to you by private investors, these private investors can be from anywhere but normally the Hard Money lenders would want to work within their own state, so if you’re from California than you want to find an investor in California.
So what type of Hard money loans the Hard Money Lenders will do?
The First type of Hard Money Loans lenders are offering is Construction Hard Money Loan.
In construction Hard Money Loan the Hard Money Lender will loan the borrower the money in stages, example: You own a land in Los Angeles California, on that Land you want to build a house, you have the Plans approved by the city of Los Angeles and you’re all ready to go, now you need a Hard Money Loan because it will be easier to qualify and get the money you need for the construction.
You will call a Hard Money Lender and give your information, the approved plans, your financials, your budgets for the construction(you can get it from your contractor), then lets say the Hard money Lender agrees to Loan you the money you need, but the way the Hard Money Lender will Loan you the money is by stages, and the stages are:
When your Contractor will finish the foundation, the contractor will get paid after inspection that is done by the Hard Money Lender $10,000 for the foundation work. Than when your electrician finishes the electricity in the house, than the electrician will get paid after inspection done by the Hard Money Lender another $7000.
You understand the concept?
Everybody by the completion of the construction will get paid by the Hard Money Lender.
Why the Hard Money Lender do that?
Because he want to have control of the money, private investors know the risks they’re taking but they’re still willing to take these risks only if they have 100% control of the money.
Why Hard Money Lender will choose to Loan money to Investors and not Homeowners?
This is a very good question that a lot of people should know the answer for.
The Hard money Lenders wouldn’t want to have to take a homeowner out from his home because he didn’t make the payments, but with investors it’s different, it’s 100% business and that’s what the Hard money Lenders want- Business.
What type of properties Hard money Lenders will Loan money on?
A Hard money Lender will Loan money to many type of properties: Single Family Residents, Condos, Townhouses, Apartment Buildings, Hotels, Motels, Office Buildings, Shopping Centers and many others.
What hard money Lenders don’t like, it’s Land. It will be very hard to find a Hard Money Lender that will Loan you money on a Land, and the reason is because there is no income to Lands, maybe you can get a Hard money Loan on a Golf Course or maybe a Land that you about to develop something on, but raw Land- Forget about it.
Today Hard money Lenders Loan more money to Commercial Real Estate investors rather then to residential investors and the reason is Less risk.
Today the Residential market is not going up, Values of Homes are actually going down by more than 30%, and every day more foreclosures are coming out on the market, so the Hard money Lenders are smart enough not to participate in taking risks with homeowners.
Commercial Real Estate is still very competitive, investors are still buying properties, remodel properties and build new properties.
The Commercial Real Estate market is still alive just like it was in the residential market 3 years ago, and Hard money Lenders are still in the game, and now they’re busy more than ever because the Banks don’t Loan money that easy to borrowers.
So it’s Commercial Properties rather than residential properties, and Construction Loans.
Good Luck
Good description about different loans..A good hard money lender only could give the best way in this field..Like selecting the best…
My home was in a fire last summer and I lost everything. After the insurance paid off the mortgage there wasn’t enough to finish the job so I need a construction loan. I found out my credit score is low because during the process of the fire I forgot to pay one of my credit cards and that was the only time I was late with a payment and I think that brought my score down. I’ve been on time with all my bills for the last six months. I need to know what and where I need to go to be able to get back into my home. Thank you