How does a newbie find a good hard money lender?

Question

Hey there team,  So I've talked to some lenders and want to get pre-approved for 100k.

Long story short I found a duplex with each unit being sold separately by the same seller whos asking $60k each.  Each unit generates $1100 a month each and are currently occupied.  I want to offer $75k and negotiate from there but I am a reservist in the military and only take 6 month long deployment orders and cant "hold a job longer than 6 months" according to a certain lender.  Even though I make $12k/month while overseas they still want to see 12 months of solid employment.   I have a HELOC for $35k and $11k in a retirement account I'm willing to use also.

What should I do?

Is this the time to seek a hard money lender, or maybe private money?

Thanks!

Christopher Lane · Answer

I agree, but I'm not sure I want to put all my money into one deal.  I want to have some money in reserve.  Or should I buy it, and turn around and refinance it next month?

Account Closed · Answer

Christopher,

Check out this BP podcast. There's a lot of valuable information that may help you resolve this situation.

https://youtu.be/6mNu6S-ZHWU

Stephanie P. · Answer

If you do them separately, the only lender in that space that will support your income will be Lima One.  Lending Home won't go that low.  Call Alan Gore.   You don't need hard money and the rates will be in the 7's.

Stephanie

Tchaka Owen · Answer

@Christopher Lane - hard money rates differ based on area. It could be as low as 10% and as high as 15%; points likely range between 2 and 4. That said, I wouldn't sweat rates so much because this deal will stand on its own. Priority is to get it under contract NOW. Think about it.....let's say you end up getting them for $110k, you're pulling in $2200/mo. Even if you're covering water, trash, etc.....you're going to cashflow plenty. Once it's running, you'll find a non-QM lender who will refinance in the 6-7% range and enjoy life. Good luck!

ps- contact your local REIA, they'll have some hard money lenders. I believe here on BP you can find some too.

Roman M. · Answer

Average HM rates are between 12 and 13%.

Jay Hinrichs · Answer

Jump on lendinghomes website and look at their pricing matrix.

it prices for down payment and experince

and loan size..

when you get under 100k it can be tough to find a lender.. simply becasue they cant charge enough to make any money for the risk they are taking.

and these are all short term.. they will want to know your prequalified for the take out.. at least I know i would.

Now you can check with Peak in KC they have a buy and hold prodcut that is between bank and short term HML rates

I suspect lending home may have that product as well.  and I think lima one has it.

and there are probably no pre payment penatlies so it maybe a little pricy now but if your deal works really well it could be worth doing it other than passing.

Christopher Lane · Answer

@Roman M. Also, what are the average hard money rates you've seen lately?

Roman M. · Answer

In my opinion, you should not have any issues getting hard money loan if you put 35% down.  Since you have $35,000 in HELOC, you can use it towards down-payment.   I  personally will have no problem lending my own money with 35% down at hard money rates.

Philip McCleary · Answer

I have used Jet Lending for hard money and it depends on the deal.

PP: 200k * .7 = 140k

Repairs = 30K

Offer price 110k

They will most likely want to see some funds in your account to cover the premiums and a % of the repairs to minimize their risk. If you find the right deal you can get in, rehab and refinance with none of your own money.