Hard Money Loans

Choosing a Commercial Hard Money Lender

Written by Harry

Being able to gain access to large amounts of money quickly is essential in the real estate market. There are often numerous buyers trying to get the same property if it is priced well. With more than 600,000 houses selling in May of 2019 alone, the market is very competitive and can be quite lucrative. This means you need to be able to get the money to buy properties quickly and this is where a hard money lender can come into play.

Traditional bank loans can take weeks or even months for approval and have stipulations that can be difficult to meet. Many real estate investors turn to a hard money lender as a way to get the money they need quickly. Hard money loans are sometimes easier to get than traditional bank loans because they don’t have as many stipulations. You don’t need a high credit score, a large down payment and can often get the money in a very short period of time.

When it’s time to get a hard money loan, you need to be sure you use the right hard money lender. With so many lenders on the market, it can be difficult to know which one to use though. The following guide walks you through a few tips you can use to ensure you work with the best hard money lender possible.

Word of Mouth Can Be Your Best Friend

The first thing you need to realize is that other real estate investors in the area can be an asset to you. You don’t want to look at them as strictly competition because there is a good chance that they can provide you with valuable information. Talk to other investors about the hard money lenders they have used. Find out why they recommend them and which lenders they suggest you avoid. Talking to a few different investors allows you to compare the information to ensure that people are giving you valuable advice.

Do Your Own Research About the Hard Money Lender

While it can seem like you need to rush to get a loan when a house comes on the market, doing research ahead of time can be really helpful. If you know that you want to invest in properties in the near future, do research on the hard money lenders that other investors suggested before you actually need to buy a property.

Look for information about the company with the Better Business Bureau. Unsatisfied borrowers can file complaints with the bureau that you can read. According to the Better Business Bureau, trusted lenders never ask you to pay fees upfront for a loan. “A real lender will post those fees prominently and collect them from the money they are lending you, but a scam lender may try to collect them as a condition for you getting money. ”  If you see that the lender has numerous complaints against them, they may not be the right hard money lender for you.

Find Lenders Who Charge Reasonable Fees

There are fees associated with any loan, you get. This is the way that the hard money lender is able to make a profit off of the loan to make it worth their while in the end. It’s important to know that there is no flat fee that all lenders charge for their loan. You need to compare the fees of a few lenders before choosing which one you will use for your lending needs. This allows you to be sure that you don’t overpay for the loan when things are said and done.

Ensure Commercial Hard Money Lenders are Licensed

A real estate broker license is required in order for lenders to be able to legally lend money to real estate investors. Ask for the license ID number for any hard money lender you think you may want to work with and run the numbers through the real estate bureau within your state. You want to be sure that they really are licensed and that they have been in business for an extended period of time.

Meeting with hard money lenders can be a bit intimidating at first. Ensure that you work with a lender who makes you feel comfortable, not pressured to sign paperwork for a loan right away. Reputable lenders will want you to take time to consider your options to ensure you make an informed decision regarding their hard money loans. Be sure that you read the details of any agreement closely so that you understand when payments are due, what the interest rates are and how long you have to pay back the loan. Hard money loans typically need to be paid back in a short period of time in comparison to traditional loans so make sure you understand the logistics of the agreement is essential.

References:

https://www.bbb.org/article/news-releases/16919-bbb-tip-advance-fee-loan-scams

https://www.census.gov/construction/nrs/pdf/newressales.pdf

 

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Kentucky hard money lenders offer funding to those who are unable to obtain financial support through conventional sources such as banks and lending institutions. Kentucky hard money is private mon...

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Harry

7 Comments

  • You may think that the other steps of the lending process are much harder. Remember that you will be dealing with that one throughout the whole hard money lending process..But by reading a couple of tips on how to choose one, you’ll be able to find this step to be a breeze. Not because there are several lenders out there, you ignore the process of selecting one. It’s important that you don’t take this step of getting a hard money commercial loan for granted. Though those other steps may be more complex, choosing a lender is as important. So it’s important that you choose the right commercial hard money lender?

  • How can you believe and go with a lender that doesn’t seem to be like one. Thus, they are also called private lenders. You can’t seriously believe one to be successful in lending if they seem unsuccessful themselves. In short, they have a lot of liquid assets. In a nutshell, these people or groups have readily available money in a large sum that can easily be disposed. They choose to be discreet because of the money that they manage on a day to day basis. Thus, you should observe them, their offices, and their belongings or assets to check if they are really well-off. These types of lenders usually work at the safety and comforts of their homes with their private office. They can lend people in need of investment money at any given time..They are rich?

  • Remember that your lender can be like your best friend in this business venture.. Below are some tips on what to look for hard money commercial lenders.Note that you will be working with your lender throughout this venture. Thus, you must know how to choose one properly?

  • I am a real hard money lender in Las Vegas,NV and I lend to people every day but I don’t see anyone on your site who is a real lender. Who are you and why are you running this site if you aren’t a lender also? Corinne Cordon.

  • I have 3 properties I woulld like to purchase.
    One is in Salt Lake City price 170k
    Worth 350k needs some work-minor
    The next is an assumable loan on a 11Plex in Az.
    The price 220k I need 90k for that one,good cash flow.
    The best is a FL 97 unit 50k per month income.
    Tom
    801-688-5266