The Blocking and Tackling of Hard Money Lending
Football season is finally here so it’s time for a heavy dose of sports analogies.
When you apply for a hard money loan to fund your next fix and flip, how can you make sure you don’t throw an interception and have your loan application racing in the wrong direction towards the opponent’s end zone?
Think back to Vince Lombardi patrolling the sidelines in Green Bay years ago. It was all about the fundamentals – blocking and tackling!
So what is the blocking and tackling of hard money lending?
Let’s start with preparation.
- Anticipate questions that may arise. How did I arrive at my budget? Are the improvements I am making directly impacting the sales price?
- Make sure you have current financial information ready and in an organized format.
- Understand what is on your credit report. While not critically important for a hard money loan, you still need to be able to address inquiries.
- Have there been any new properties that have been listed in my subject market area?
- Are there any new sales?
Then let’s execute! Set, hike.
- Your team needs to communicate and work towards the same goal. This includes your attorney, insurance agent, realtor, architect, general contractor and lender.
- Time can kill all deals – this includes delays in the closing process as well as project completion post-closing. Don’t let the clock run out on your deal or your profit.
- Get first downs and the touchdowns will follow. Every deal doesn’t have to make six-figure profits. Be consistently profitable and the rest will take care of itself.
- The best offense is a great defense. A great defense in the real estate investment business means being able to mitigate your risks and knowing your options.
- Be ready for that double reverse! Be creative, flexible and opportunistic.
- Deal components always shift – be able to quickly assess how the changes impact your profitability and react accordingly.
Comments