Hard Money Loans for Investors

Hard Money Loans for Real Estate Investors

Hard Money loans are a great way for real estate investors to take advantage of a market where there is an abundance of opportunities for them. Short sales, Foreclosures, REO’s, Rehab commercial and residential investment properties are available for never before seen deep discounts. As a real estate investor now is the time to be in the game and buy as much as you can. But there is a misconception that even though hard money lenders are focused on the collateral that they will do any loan regardless of credit, income,or character.

Collateral is King.

Yes, the main determining factor is not credit, verifiable income, or assets like in a conventional loan. For hard money lenders the Collateral is king. This means that if the collateral is good then there is a good chance for them to do the deal. The misconception is that the collateral is the only thing. No they are not credit score driven, but if you submit a credit report that shows you do not pay anyone the hard money lenders are likely to pass. No they are not income drive. But if you show no ability or history to repay a loan they are likely to pass. If you have no assets, no verifiable income and terrible credit, Hard Money Lenders will still pass on the deal even if the collateral is good with a low loan to value.

Other Factors in Qualifying for a Hard Money Loan.

Because these are private investors they are not blind and they all set their own criteria. The key is that they are comfortable that the borrower will do what they say they will doe (like rehab the home in 30 to 60 days) and pay them back. Therefore a positive track record as a real estate investor and or a good team including Realtor, contractor and loan consultant are all important to them. It is also of utmost important to have a viable exit strategy. It is not good enough to say you will refinance the property if by looking at your credit profile you will not qualify for a refinance loan. Likewise it is not good enough to say you will sell the property if you do not have pre-approved buyers (more than one) waiting to purchase the property.

Hard Money Loans Guidelines.

So we know that the collateral is king and the borrower does not have to meet conventional guidelines to qualify, but there the bridge money investors look at a complete profile and it is important for we are pretty sure you will qualify before you or I invest a lot of time and energy in submitting a deal that has no merit.

Another Misconception About Hard Money Loans.

Some people believe hard money lenders ultimately want you to fail so they can get the property. Truthfully that is not why they are in the business. Just like banks do not want to own REO’s private investors who make bridge loans do not want to own your properties. The reason the offer such low loan to values is if they do need to get involved they can sell them quickly to replenish their funds and do what they do, lend money.

So do not be misled. You must be able to deliver what you said and show that you can quickly take the private lender out of the transaction if you want to take advantage of the market to day using hard money loans. I can help you package your deals so you could qualify.

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