Hi everyone! I'm new to real estate and real estate investing. I currently have one rental property, which I bought conventionally, but I would like to acquire more. I am considering a hard money lender for my next purchase. Any advice or suggestions? Thanks.
What hard lender is going to take a chance loaning to someone with near zero experience? Hard money loans are expensive and for a short period. So, you had better know what you are doing because a hard money lender will want whatever equity you have for your 'one' property and if you fail to fulfill your obligation to pay you will have zero properties.
@Khadijah Oliver - awesome that you already own a rental, that definitely gives you credibility in any lenders eyes. Hard money is usually in reference to short-term loans (12 months, interest only) and not ideal for a buy & hold. BUT, you can still find financing with a non-bank option. There are lenders that can offer you a 30 yr fixed rate based on the rental property's income and not your personal income. You'll be required to put 20% - 30% down.
@Khadijah Oliver thanks for posting. Like a lot of things, Hard Money has it's "pros" and "cons" to it but when seeking a good lender to work with I would encourage you to work with one that is helpful. Especially early in your career. Gaining knowledge is just as important and a fee. So if one lender is slightly higher but they are more helpful, I might say to work with that lender. Knowing appraisal value on your home, renovation costs, recommendations on lenders who can refinance you OUT of their money, etc. All of those things would be terrifically helpful to know on any property that we buy. I might even recommend being completely upfront with them. Saying something like "I'm shopping around and don't know much about your company...what can you tell me?" And see what they say. Or even something else like "I'm really struggling with X...could you help with this?"...and see what they say. There's probably lots more to say on this subject but I feel those are good places to start. Good luck!
@Andrew Postel good to know. Thanks for the tips, very helpful.
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