Finding Hard Money?

Question

Let me just reiterate...I am a newbie!  A co-worker and I are wanting to take the plunge together, and dive head first into REI.  We have gone to the bank, a bank in which I have superb past business credit history...and they have told me that no bank will loan money for what we are wanting to do.  If no bank will loan to us...I believe the only other option is hard money.  All that we have read makes this process sound so easy....is getting a hard money loan really that easy?  Especially with this being our first deal?  Just FYI...we are in the Houston area.  Any info is greatly appreciated!

Jon Holdman · Answer

What is it you're wanting to do the bank won't let you do?  Hard money might or might not be an option.

Michael Quarles · Answer

You would be better served using private money and not hard or equity lenders...

Once you het 4-5 deals then deside if you want to use your own...

Start asking your COI who has buckets of money in the bank earning 2%

Good luck

Michael

Michael Quarles · Answer

Good to meet you
          
          Find an Equity lender over a hard money lender... Almost the same however the major difference is one doesn't care about credit and the other will still try and qualify you..
          
          Finding these guys is easy... 
          
          Happy money hunting
          
          Michael

Kevin L. · Answer

Thanks to all of you!  I added you as a colleague Stephen...i think....i am still trying to learn this site.

Stephen Moore · Answer

kwl1982 i have several guys in the houston area that lends hard money,send me colleague request or email me ....ill send you the contact info

Justin S. · Answer

Curt, I do not understand your post.

How does the type of loan have anything to do with the appraisal?  It sounds like the clients made bad decisions and would need to come to the closing table with money regardless of the loan type.  Or did I mis-read your post.

Kevin L. · Answer

I apologize for not being specific....our intentions are to flip distressed properties in the $30k-$55k range...hopefully for resale in the $80k-$110 range.  We have gone to the bank with these ideas, and they have told us that no bank will finance these properties until they have been rehabbed.  The banker did say that there would be no problem getting them out from under hard money with a conventional 30 yr. mortgage after they are repaired.  Thanks to all of you!

Curt Davis · Answer

Hard money loans in theory are very easy, but you need to be prepared if the appraisal comes in lower than expected.  What will you do when the appraisal comes in about $35K lower than expected.  The hard money lender could foreclose on you which will ruin your credit and make conventional investing almost impossible. You would be better off locating some private money.

Right before Xmas I had 21 clients ( new and experienced investors ) who were all stuck in a hard money loans b/c the appraisals all came in an average of $30k lower than expected and the company I was with we actually did pre appraisals using appraisers. Then, when the value came in lower the client had a few options:

1. Pay the difference. Usually an additional $25k to the table to close.
2. Walk away and be foreclosed on and forget about investing.
3. Move to a different lender and start the process all over again.

Stay away from hard money loans, otherwise be fully prepared for the worst. Good luck

Finding Hard Money?

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