Looking for Hard money lenders

[Manish Kumar]

Hi,

I am looking at a great deal and am looking for hard money lenders who can help me close it.

What's the best way to proceed with this? Can I find contacts of hard money lenders in the lender's section, or is the only way to achieve this through social connections and meetups?

[Bryan Maddex]

Quote from @Manish Kumar:

Wow, I am overwhelmed with the responses. 

I knew the community was great, but this is awesome. Instead of replying individually, thank everyone for the responses.

A few of the great questions that are asked and that I should have already included in my post are here.

1. This is my first time doing hard money loans

2. I am looking for at least 95% of the property value, if not 100%

3. This is not a fix-and-flip. I want to buy the property, stabilize the income, and refi (or cash-out refi) the property later on with a conventional loan, hopefully in 12 months.

4. I am looking forward to closing the deal in the next 30 days

5. There is no rehab needed on the property

6. The property is a mix of residential and commercial (to some extent)

7. The loan amount I am looking for is 700-800K

8. I got a 730+ FICO score.

Again, thank you, everyone, for the fantastic and knowledgeable responses. I will send personal messages for further discussion.

These forums are a great place for investors of all experience! Glad you found them  :)   See notes to your recent post:

1. Welcome!

2. There are lenders that will finance 100% of the purchase price and 100% of the rehab cost, I have at least 2 partners that offer 100% financing, first time investors are ok. ARV (after repair value) will be determined by your credit score and experience.  680-700 they do 65% ARV, 700+ and new they do 70% ARV, 700+ and experienced they do 75% ARV.

3. You will not find 95% or 100% financing from any institutional lenders. Private lenders (people who have lots of cash, or self directed IRAs) may offer 100% financing but guessing this is extremely rare AND would likely be extremely expensive (like 20% rate with a few points).  Everyone wants you to have "skin in the game".  If it is easy to walk way, and things do not work out the way you thought they would, no lender wants to be stuck taking back a property with no equity.  You are really looking for a DSCR loan, not a Hard Money Loan.  DSCR loans use the properties income instead of your personal income for income qualifications. Hard Money Loans (institutionally anyways) refer to loans for Rehabbing a property and are Short Term debt vehicles (usually 6 to 12 months depending on the lender).  

You may be able to find an "equity partner" that can give you 15% or 20% of the purchase price, and you give up part ownership of your business. Getting 75 or 80% of the profits is better than getting 100% of no deal. 

4. DSCR loans generally take 3-4 weeks to close.  I have closed DSCR loans in 2 weeks but that is not super common.  Hard Money loans can close in a couple of days depending on the lender and the project. 

5. You can "create" your equity and down payment with properties that need work, or come up with down payment money yourself. There are not 95% or 100% financing options for investors.  If you were to live in the property and finance it with traditional financing (FHA, USDA, Conventional Loans thru Fannie/Freddie), you can find 0% down, 3% down, 3.5% down, and 5% down options as an owner occupied buyer. These programs will all be full doc or fully underwritten loans using your Tax Returns, W2s, Paystubs and verifying all of your deposits. 

Investment purchases for rental income can be done with Fannie/Freddie doing 15-25% down (depending if it is a Single Family or 2-4 Unit property), or with NonQM financing (NonQM loans are anything outside of Fannie/Freddie and "agency" loans). Most will require 15% to 20% down. 

6. Fannie/Freddie allow this if you live in the upstairs units as an owner occupied property. Many NonQM lenders and DSCR loans will allow this. 

7. If your purchase price is $800k, you will need to find $120k minimum for financing in your situation. If you do not have that, i would look to split this deal with an equity partner who can bring assets to the table for closing. 

8. This should be good for all NonQM/DSCR lenders and some lenders would consider this perfect credit. 760 is also a common "perfect" score for long term financing. Short term financing (hard money), usually needs a 680 or 700+ score. 

Good luck with your opportunity! I hope you can find a funding source to take it down!