Fix & Flip Financing Real Estate Financing

How To Get A Hard Money Loan

This post will provide some guidelines on how to get a hard money loan, which is utilized by architects, land developers and small businesses to buy machinery or real estate property to avoid the need to sell any assets. However, before people should push through with their applications for hard money funding, they should familiarize themselves first with regards to the risks and benefits of a hard money loan. The disadvantage of this type of loan is primarily the high interest rates and other fees that are charged by the private lender and that you might sign up for a rate that would be bigger than you can handle. The advantages of a hard money loan are mostly the speed with which they are provided compared to conventional loans and the fact that they would not depend on the credit score of the borrower.

The first step in looking for this kind of loan is to search for lenders who have already experienced providing them. Banks and other traditional sources of funding do not provide it because of the high risks that are involved. And after you have located the hard money lender who has successfully provided this type of loan, it would be advisable to determine the prevailing money rates. However, the interest rates are not based on the federal rates but on the various loan quotes that have been made.

The next step is to have an expert determine the value of your property because this private money loan would be based on a certain percentage of this value. Make sure that you get the proper documentation that would get the appropriate loan amount. After this, do not forget to ask for the advice of a real estate lawyer and determine the usual prepayment penalties and what would happen in case of default.

Remember to apply and use only one hard money loan at a single time to avoid getting into a situation where your property may be foreclosed. Make sure that the projected cash flows of your real estate project would be capable of paying for the loan. In fact, a certain safety factor should be incorporated in the event that the expected amount of cash flow does not materialize. The final step is to work on the construction contracts, building permits and other documents that would be needed for conventional loans so that you can avoid the high interest rates in the future.

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  • Im only looking for a $6,000 loan I am ready to close earnest money is paid and inspection completed. I am a contractor will be doing my own renovations. I have references if needed.

  • Offer just accepted on our second flip project. Need 50K, we have the rehab money and ARV is $102K. We have a project completed that profited $20K on our own. We are incredibly educated on the process as well. Signed on 6/8/12 need 50k ASAP will provide joint venture agreement and interest/points agreed upon.

  • I am looking for a hard money lender for a $49K loan on a $100K property in Southfield, MI. I have $10K. The property is selling for $59K. Conservative comps at $100K.

  • Hi im a property specialist and im looking to flip properties in 30-90 days or less I found a deal online HARD MONEY LOAN NEEDED!!!! for 2 fix & flip ASAP!! Home needs rehab, total loan amount is $60.000 each ***Im an Experienced Investor/ Realtor. In contract, title is done ready to close. 60% LTV & 60% LTV ***Exit Plan, & Title, done. Apprasial Also Done on Vanguard. Pre Payment OK if it a must….. Need to close 10 days, less would be even better.. ( 60k contract price & cash total ) Only looking for a Short Term type of loan, interest only. Please contact Tammy 407 929 9161 To discuss terms

    Loan Location: Palm Bay , Florida
    Property Type: Residential
    Loan Amount: $ 60,000.00
    Loan to Value: 65%
    Property Value: $ 100,000.00
    Loan Term: 1 Years
    Credit Score: 602
    Down Payment: None
    Loan Type: Purchase
    Contact Phone: N/A