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Dealing with Hard Money Lenders

To invest in real estate, you need a stable source of funds so you can act quickly in case a good deal comes your way. But if you don’t qualify for a bank loan, it would be difficult for you to obtain the financing you need. hard money lenders, hard money loans, real estate investing

By: Daniel Mc Grey
Category: Real Estate
Posted: Dec 14, 2009
Updated: Dec 14, 2009
Views: 127


To invest in real estate, you need a stable source of funds so you can act quickly in case a good deal comes your way. But if you don’t qualify for a bank loan, it would be difficult for you to obtain the financing you need. Fortunately, hard money lenders are great alternatives to banks and other traditional lending institutions as they are always ready to provide funding for real estate investors who require financial assistance.

The type of financing being offered by these non-traditional lenders is called hard money loans or HMLs. HMLs are asset-based and hard money lenders base their decision to approve or reject a loan application on the after repair value of a property, for which the loan is being made. If the property can attract a good deal, then they will allow their clients to borrow money from them.

Because hard money loans are asset-based, credit checks are not necessary. An investor can secure financing from these lenders even if they have poor credit rating. In addition, he doesn’t have to submit mountains of paperwork, credentials, and other proof of his financial stability.

Negotiating with hard money lenders are easier compared to their institutionalized counterparts. Unlike when applying for bank loans, you don’t have to wait at long lines just to talk to the person in charge. You also don’t have to deal with a tough loan processing team or panel. And most of all, an investor doesn’t have to wait for months or weeks just to determine the results of his loan application. A lender of hard money can assess the eligibility of his loan application and come up with a decision in just a matter of days.

To find hard money lenders, listed below are some of the things that you should do:
  1. Unlike credit unions and mortgage companies, lenders of hard money loans don’t have storefront offices. They also don’t use glaring neon signs to advertise their services. Therefore, a good strategy to finding them is to ask around. Who knows, your neighbor might be willing to provide you with hard money.
  2. You can also get referrals from your colleagues in the real estate investing business. Most of them have already experienced working with these non-traditional lenders. Therefore, they can point you to the right direction.
  3. Surfing the Internet can help, too, as most lenders nowadays advertise their services online.
Meanwhile, if you want to learn how to negotiate with hard money lenders, visit www.Rehab-Real-Estate.com. The website has an extensive collection of real estate learning resources.

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