Underwriting a Construction Loan with Hard Money

1. Executive Summary

2. Phone consultation

3. Present two years of tax returns—both personal and business

4. soils reports on the property

5. preliminary title report

6. Contractor - We check to see that the contractor is licensed and bonded

Our threshold as far as underwriting is—with our fund for construction loans we’ll go to 65% of the future value.

Now we can go higher, but we’d have to cross-collateral or cross another property. Which means we’d put a lien on another property, this way we’d have extra collateral in case the loan went bad

We’ll go to the future value, and that’s based on a third party evaluation from an appraiser that is approved with our underwriting system, our guidelines.

we have a network of appraisers that we use and we would like to usually use our own appraiser

Tip:

Put together a little credibility kit about yourself, about your team, you know, the projects you’ve done.

The more you have the better because it showcases that you have the expertise to get the project done

And when we’re talking hard money construction loans, that’s basically what we’re looking at is that you’ve got a track record and that you’re a successful investor, developer, builder.