@Brian Faeth every hard money lender is going to be different. You just need to call each one and ask what their requirements are. I for example only really care that it's a good deal, and that the deal isn't going to stall, so when I lend hard money I only ask for bank statements showing reserves, not a credit report. Finding someone to finance 90% of the purchase and 100% of the rehab may be tough though, especially for a first timer.
Hard money lenders base the loan primarily on the value of the hard asset (which is where the term "hard" money comes from), so they will protect themselves by having a first lien position. If you don't pay, they take ownership of the property.
Experienced investors typically get better rates and higher LTV's. I'll describe what I'm seeing for a first time investor.
6 months of payments in cash reserves
3 months of bank statements
Scope of work for rehab
No major credit issues in last 2 years
90% of purchase price as long as LTV of As Is value is 70% or below (ex. Purchase price is $100,000 and As Is Value is $130,000, the loan could be as high as $90,000)
100% of rehab costs (ex. assume $25,000 in rehab)
70% LTV of total loan to After Repair Value (ex. Total loan of $115,000 so ARV would need to be $165,000
Interest Rates = 12% (lower for more experienced investors)
Brian, Does the financing have to be hard money? If your financing a rental we can assist you and it will not be at hard money rates. Please reach out to me if you would like to discuss further. Thanks
@Brian Faeth every hard money lender is going to be different. You just need to call each one and ask what their requirements are. I for example only really care that it's a good deal, and that the deal isn't going to stall, so when I lend hard money I only ask for bank statements showing reserves, not a credit report. Finding someone to finance 90% of the purchase and 100% of the rehab may be tough though, especially for a first timer.
Brian I can help you get the financing you need. Contact me to discuss your project and I will help create the loan you need so you can get moving on this project.