What are the requirements for hard money lender?

Question

Bruce Lynn · Answer

You want to check with the hard money lender for their requirements.  Each is different.

I can send you a list of some if you want.

Normally they want you to have some real skin in the game...10-15-20-25%.

They are going to take some up front processing fees from you....$1000-$2000-$5000.

Deal has to make sense....They probably want to see your contract, your comps, your rehab, your project timeline.   Typically they're experts, so you want real solid numbers...or they will flush you out if they think your numbers are off.

What are you protecting yourself from?  Typically they are non-recourse loans.

If you default potentially they could benefit....but that is not their goal I would think.  They're not rehabbers, they're lenders....they don't want to get dirty.   As with most lenders, they do NOT want the house back.

David Weintraub · Answer

you have my email.  send it over.

David Weintraub · Answer

Fees and closing costs could be:

appraisal, title, legal, points/origination fees, underwriting fee.

Ultimately, the legal can be between $500-$1200, appraisal $300+, points will be the biggest factor, etc.

Teri Feeney Styers · Answer

I just bought a house with no points, 10% down, 10% apr - it is really an "owner carry" but the owner is an LLC that is wholesaling it to me - I felt that was kinda like a hard money loan.

David Weintraub · Answer

But yes, an individual can be a HML.  Podcast #222 there's a great example.

David Weintraub · Answer

Bruce has covered most of it.  In our case, no felons, no foreclosures (some exceptions.  Credit not a determining factor at all.

Experience is a big plus, be it real estate, contracting, etc.  Hit me up if you have other questions.

What are the requirements for hard money lender?

Most Popular Reply