Hard Money Lenders
I am just getting started, so any help would be appreciated. I have read "buy it, fix it, sell it for profit "by Kevin Myer. It is a great book. It was the first time that I heard the term "private mortgage lender" or "hard money lender". I have looked in the lenders section of this site and have contacted some of the HMLs listed there. I have not actually talked to any of them yet. Is hard money really as easy as it seems? What I mean by that is, what are HMLs looking for? My understanding is that it really isn't based on credit, it is based on the deal. If that is the case, how do you line up HMLs before you have a deal? Is it based on income statements and bank balances? I am trying to get the financing in place at the same time that I am looking for properties. Is this bass ackwards?
I have a good income, pretty good credit and 80k+ equity in my home (it was my first rehab project).
Should I be running at this another way?
Hard money lenders all have their own way to do the deal. You can expect to pay anywhere from 11-19% interest only for a year or two years. Find your property first and then contact a lender. Have your ducks in a row ie. cost to repair, ARMV etc. Most private lenders are investors thmeselves and if they are local will guide you the first time.[ Edited by 8ball007 on Date 02/10/2004 ]
My husband and I just recently did our first hard money loan. The company we dealt with made it so easy, the actual process only took about 20 minutes . The only thing they wanted to see from us was a drivers license. Our rate is 18% and they require a minimum of 5% down but I hear they will do 0 down.we also paid an extra $500 which takes care of insurance for the property. Our intention is to fix and sell quick but we have up to six months,longer if necessary. The title remains in their name but the deed is in ours, thats why they don't worry to much about credit, if we miss a payment they take the house.
Another thing we just did was took out a home equity line of credit, it really works out well because the rate is low and we are not charged if we do not use it, we are using it as back up just in case we need more $$$ in a hurry.
Staylor,
Thanks for the info. Would you mind sharing the name of the company?
What do you mean?
"The title remains in their name but the deed is in ours, thats why they don't worry to much about credit, if we miss a payment they take the house." ????
Nice to meet you brettjamesburas,
Based on what you've sad you are doing just fine but your town might be to small in which case you should direct your searching criteria towards bigger LA centers. Did you try placing an ad in the paper's real estate, finaciaor other business section? Did you join any real estate clubs? If you didn't, try doing that then come post again and let us know how did that method go for you.
If you do not find anybody in your aria, I might be able to refer you to a bigger players. The only problem you might be having with that is the size of your deals because the people I use are looking into nationwide projects that starts at 1 mill. On the second thought I might even have some that might go for the smaller deals although the problem might be your location. Keep in mind, HML usually like to see where their money is going to be invested. Local people I am working with are always doing so so finding the one's that specialize in your state's niche should be your first priority.
Good luck!