Hard money lender ...

[Timothy Albright]

Hello BP!

I’m Curious if hard money lenders have general requirements? Or, will that very from lender to lender ? I would love to hear about any interactions you all have had with hard money lenders and what I should expect. Thanks again for any info!!

[Jay Hinrichs]

Originally posted by @Karan Malhotra:

Originally posted by @Joel Thompson:

@Timothy Albright I am a lender, and think I can help out here. What kind of general requirements are you thinking of?

Typically we're not going to lend over 70-75% LTV, most lenders will only lend to an LLC, generally you'll be required to either have a down payment or property you own free and clear to cross-collateralize.

Happy to explain further if helpful.

Can you further explain on cross-collateralization a little bit? As a lender, when I lend I take a lien out on the property that the borrower is investing into, the property that I lend a % LTV to. I take points on top as a form of down payment; do you charge a separate fee? And in terms of cross-collateral, do you cross-collateralize a SECOND property aside from the one the borrower is investing in? Or are you talking about that very property?

Please let me know, as I'd like to know how to further expand and develop my techniques. 

Thank you in advance!

~Karan Malhotra

what he is talking about is an ADDITIONAL property to cross collateralize..  if the subject property is short on Equity.

also if your doing multiple loans with a lender the fine print will also advise you that all your loans are tied together.

so say you have 5 loans out with one lender .. and for some reason one is not going right and you default on that one the lender can call al the rest of them due and payable.. this catch's some borrowers by surprise..