Need more info on the hard money process

3 Replies

So I am at the point where I want to buy my first house to flip. I am so ready. I have a few potential investors but will need to get a hard money loan to start for at least a portion. I want to know more about the process in obtaining hard money and what I should do before hand.

I am in Orlando, Florida.

I’d like to know, first what is the first step in obtaining hard money? Do I need to pre qualify myself or do I just need to find the house first.

Do I have to have the hard money loan first before I buy the house? Or vice versa.

If I find a good deal and need to jump on it how fast can I obtain a hard money loan?

Do I just need the house under contract first?

Any other advice would be helpful!



For HMLs you don't generally have to pre-qualify yourself. Of course it can never hurt to network to know what type of loans they offer. For instance it's good to know what their minimum loan amounts are, what credit score they can work with and the like. Almost all HML's for instance will not lend a mortgage which is less than $75K, for some its much higher.

Once you have a house either under contract or close to under contract you can then properly approach a HML. Most may want you to complete a loan application form. Once they have that they should be able to provide you with a loan terms sheet for your consideration. Make sure it also includes a list of fees and charges.

Remember if the HML is not charging, very approximately, somewhere in the realm of $8K in points and fees of various descriptions, its probably a good idea to ask what hasn't he told you. HMLoans are convenient and fast but not cheap.

A HML should be able to give you a rough estimate of the expected loan closing time. It is faster with those that have their own in-house appraisers or can work with a BPO. Some like us who are usually at the mercy of a third party appraisal company will likely be able to close in 2-3 weeks for a SFR (1-4 units). In my experience it is always a good idea allow more time for closing than less time, remember that when you negotiate with the seller.

It is always good to also have plan B. Just in case the mortgage does not go through for some reason or the other.

If you know other flippers who do more or less the same as what you are contemplating, it can never hurt to ask them for a recommendation on which HML they found to be good to work with.

Best of luck with your endeavors.

I would advise you to get pre-qualified first, I can help you with this. You don't necessarily need to have the property under contract first. Lets go over your deal! I'd love to help.