Approaching Hard Money Lender
I've been reading and reading and I'm finally ready to take some action but I don't know how to approach a hard money lender. A lot of the books I've read say you should get your financing lined up before you talk to any sellers. SO how do I approach a hard money lender? Do I need to have a typed out proposal to show them when I speak to them with just the general idea of rehabbing? Or do I need to find a house first and get comps, repair estimates and such? Any help is greatly appreciated. Thanks
Just explain that you're new to investing, you're in the process of getting your "ducks" lined up by seeking financing for future deals. They will tell you what they require (comps. appraisals, estimates, etc.). You'll need to find out all of the cost factors so that you can estimate your deals, but how much of what kind of documentation you provide is an individual matter...although you'll find a lot of common things amongst them, too. Don't be afraid to ask for advice as you might get some really good tips, and be sure to ask for referals...you'll need a good insurance agent too. Some will require employment verification and credit histories, others won't. Spend some time a talk to a lot of people other than professional lenders. Maybe your attorney, CPA, financial planner, doctor, etc. may be interested in investing too.
If you have an investor in mind, simply let them know what you are looking for in properties and let them lead you in what they like and don;t like.
If you are just starting, you need to ID your deal and maybe post some of the pertinant details here to get some advise from other members as to whether a hard money lender or more traditional lender is best for the particular property.
Deals worth doing will get done. The only variable is whether you will be able to do it or watch it get done.
any deals that require substantial remodelling are most likely way more trouble than they are worth for you to get started on. Look for someone with 25% or more equity and you will both be happier and have more success then will be more prepared to take on the complex opportunities
I have had good experiences with my hard money lender. They now call me to use their money. They even find me deals! The key, for me, is to use their money and refinance as soon as possible. My hard lender finances 100% of the rehab and 95% of the purchase. It is a good feeling to know that you have the cash. [ Edited by Chicagodiva on Date 07/14/2004 ]
what is the rate and point for that?
Chicagodiva,
Who is your lender that can give you "my lender finances 100% of the rehab and 95% of the purchase" ? :-?