What is required from a Hard Money Lender

Question

I'm trying to figure out what is needed from a hard money lender to get the loan? I just came across a property that I want to try and rehabb myself then sell.  Any help is appriciated.  Oh, and If anyone knows of any lenders in ohio, or who will work with some one from ohio please let me know.  Thanks!

Wes Tuinstra · Answer

Hi Jenice,
          
          With Hard Money, they are looking at the deal itself.
          They ask themselves, "If Jenice can't keep up the
          payments and we end up 'owning' this deal, is it a 
          good one for us?"
          
          If the answer is "yes" they will loan you the money,
          even if you're credit is in the toilet.
          
          They don't usually loan for longer than 2 years.
          
          They charge high rates and several points (4 to 6) up
          front. It's sort of like taking a cash advance on your credit
          card. High rates, but you can get the money quick, and then
          take out a more usual loan and pay it back.
          
          I would be glad to work with you on this and see what my
          hard money sources have to say about your deal.
          Email me the details why don't you at [REMOVED] and
          let's at least look at it.

N/A N/A · Answer

Hello, I'm just starting out, I have found a place that is forclosed...  With a potential to maybe turn a $100,000+ turnover on current value..  Looking to get and flip, and will be my first..  I'm highly motivated to move with this because the location is just awesome, and with a total gut, could fetch well over the value..  It lookes like a pot-of-gold...

I need some more info of a hard lender..  I could get this done in 3 months tops...

I need options..

Thanks folks, love this place, it's very informitive..

Duples;
$27,900 Foreclosed ( asking price )
$84,000 current value With a value range of $74,000-$149,000
73% owners in area with pop. of 5,849 ( 1 mile )
A main street, across from a hospital
CHA-CHING BABY, I just feel it..
NorthWestern PA  Location is secret publicly :green: 
Sorry for the babblin

Ryan Webber · Answer

Jenice, if you are looking for local HML's, I'd recommend that you do some networking at your local REI Club.  Wesley can probably give you some good national HML's.  You can also just do an internet search for hard money lenders.

As has already been described, HML's are based more on the property and its equity versus your credit or assets.

If you are planning on doing a rehab as you described then a hard money loan is a good way to get started.  You will need to factor in the different costs for financing when evaluating deals.  Hard lenders do require a low LTV (usually 65% or less), but on a rehab you should be under 70% of ARV anyway.

N/A N/A · Answer

Hi - hard money lenders evaluate the property and they only lend up to 75% usually.  They usually perform their own appraisal instead of a loan officer requesting one.   They don't look at your credit score really nor your abilty to repay.

If your credit is less then 500 and you really don't have the income...I will suggest you wait until you are at a point that you can qualify for at least a conventional loan for at least 75 %.   Like the last person stated the rate is high and the points are ridiculous.  Many loose their home because they can't truly afford the mortgage note on a hard money lender.

If you would be in a position to refinance your home within 3 month from a hard money lender - then I say you have an option.

Rest assured that if you miss a payment they are not as cooperative as a conventional lender -  25% of equity in it - and an investor mentality...lol you better suck salt to make those payments   LOL.

If you are  an investor and you plan on flipping it ...then HM is an option.