Sunday, 17 May 2015

How to Find the Best Hard Money Lender in California

Finding the best lender in California could be a bit difficult job, but if you follow the following tips below this task will be a lot easier. The following tips will help you to find a good and the appropriate lender in your area for business.

Find The Best Hard Money Lender
Finding Hard Money Lender

Locate the best Lender

It is important to that you do not allow your desperation to lead you into bad decision and inappropriate deals with lenders. While you are in desire situation, it is recommended to do online search to find the best lenders that meet your needs. If you are rushed out for time, you will discover that you are paying for a loan that is nowhere near value for money and there are a lot of bad deals in the market. But not to worry; there are still some honest hard money lenders in California offering affordable rates, you still need to search for them.

A non-recourse loan

While you are doing online research, you will discover that there are two types of lenders available: the recourse loan and the non recourse loan. If you opt for the recourse loan you will be putting yourself in danger as the hard money lenders will be able to repossess your house if you are unable to repay them. Furthermore, they will also be able to take legal action against you and surely you will.

However in non-recourse loan does not allow to take legal action if you are not able to pay, but the lender is still able to reprocess your house. Non-recourse loan is favorable and you should check which loan you are opting for the before signing the contract. Do not be conned into losing more money than you owe.

While searching for hard money lenders, you will also come across the term 'points on a loan'. A point is worth 1% of the overall mortgage amount, which means one point on a $ one million is equivalent to $10,000. Usually hard money lenders will offer loans between four and eight points. So it is unlikely you will ever find a loan that is offering one point. You should always search for loans with lower points, the less you will have to pay in the long-term. It is advised to that you stay below five points otherwise you will be swamped with the costly and unforeseen fees!

Know your terms

It is crucial that you know what you are signing up for and be sure that you are aware of all the terms in contract. There will be lenders who create loan structures designed intentionally to fail, particularly those with interest-only or the adjustable rates, you have to know how to identify these. You must also be sure of the exact amount that you will be paying immediately and over the duration of the loan. If a contract is open to change, it is unlikely to be beneficial and should be avoided at all costs. If the amount is constant, there is a possibility that the price may expand quickly and ultimately become huge to repay.

For more information on hard money lenders visit

Thursday, 14 May 2015

Is Hard Money Loan Right For You

Don't let the moniker mislead you. Securing a hard money loan is easier than you think. In fact, it is easier to acquire a hard money loan than it is to find investors and companies that offer them. But not anymore!

There is a fairly reasonable chance that you have never even heard of a California hard money loan, much less found one. It is a pretty low-key lending alternative, and for good reason. With the potential millions that can be made through hard money lending, and the massive real estate empires to be had, it is no wonder savvy investors want to keep it secret.

Today, we are going to let the proverbial cat out of the bag... Get ready to discover the fastest, simplest way to translate lucrative real estate opportunities into an actual real estate empire!

The Core of Hard Money Lending...

In the simplest of terms, hard money loans are a "creative" lending alternative that offers borrowers a wider variety of many options, with less financial scrutiny. In exchange for these concessions and the increased "permissiveness" in the credit history and financial areas, California hard money lenders are rewarded with higher interest rates and returns than conventional lenders typically earn.
This means that even those of you who had NEVER qualify for a traditional loan now can have a realistic, ethical opportunity to build a multi-million dollar real estate empire one deal at a time. However, aside from the higher interest rates and the lower levels of financial scrutiny, hard money loans are remarkably similar to traditional secured loans.
There are a few other differences that must be taken into account as well:

1.       When borrowing against real estate, hard money loans typically have lower loan-to values than conventional loans
2.       Hard money loans are not backed by the FDIC, and
3.       The terms of hard money loans are generally paid off much sooner than conventional loans are.

If you are looking for big money fast and you do not have time (or the ability) to jump through the hoops or cut through the red tape of bank financing, there's no other solution that has as much to offer.

Now that you know the basics of WHAT hard money lending is, now you need to figure out if you can put one to work for you.

Will A Hard Money Loan Work For Me?

Once you discover the option of hard money lending, it is a natural way to wonder if it could make a difference in your own situation.

  •  Are you a victim of a marred (or non-existent) credit history?
  • Have a few mistakes in your past wrecked your ability to qualify for conventional financing?
  • Has a recent divorce or bankruptcy made you a leper in the lending community?
  • Have you stumbled across once-in-a-lifetime real estate investment opportunity, but you have to act fast and have no idea where you can get the money?
  • Have you come to the conclusion that you will NEVER find the financing your hopes and dreams demand?
If the answer is yes to any of these questions, then you have already qualified yourself as an ideal candidate for a hard money loan.

However, you may have a few legitimate concerns. Fortunately, we are here to lay your concerns at rest. The most prevalent concern raised in the discussion about hard money loans is actually based on a misconception. Because hard money lenders put their money at a much higher risk than banks EVER will, and they charge higher rates to compensate, the uninformed often jump to the conclusion that there's something shady going on. Conventional lenders and people who are missing pretty essential facts don't work too hard to correct those misguided notions either.

Fortunately, "The truth is out there..."

Hard money loans follow the same basic protocols that traditional options do. Because financing is complicated under even the best circumstances, your hard money lender will encourage (perhaps even require) that you retain the services of a lawyer from the onset. Its advice you should take advantage of ANYTIME you sign a deal for a high ticket item.

There are several other parallels you can plan on as well:
·         Appraisals
·         Inspections
·         Paperwork and
·         A "closing"
...just to name a few.

One of the essential tenets of successful real estate investing is learning to apply the principles of leverage. Leveraging is about more than just putting other people's money to work for you – it is about putting other people to work for you as well. When you are up against a "big deal", if someone else out there can do it better and faster than you can on your own, you'd be silly NOT to hire them!

Their expertise is almost always worth the fees entailed. With them, you can avoid time-wasting mistakes and potentially devastating errors you might have otherwise missed.
Finding a hard money lender you can trust is the first step in the journey.

Thursday, 7 May 2015

How to Deal with Hard Money Lenders

Dealing with lenders
Despite their name, working with hard money lenders is much easier than with their conventional counterparts e.g. banks. The majority of these lenders are focused on bringing flexibility and transparency to business deals as well as restricting the amount of red tape that borrowers have to deal with. Nonetheless, here are a few secrets to getting the best deal when you’re negotiating your hard money loan:

Know how hard money works:

Hard money loans require a tangible asset to secure the loan (i.e., act as collateral). The term hard money is typically used to refer to real estate secured loans.  The lender determines the viability and amount of the loan based on the value of the property rather than the credit history of the borrower.

Know where the funds come from. 

Private lenders fund loans with their own capital. This allows them to make decisions directly without consulting with a third party (such as a loan committee).  Borrowers need to understand the difference between a direct hard money lender and a loan broker.  A direct lender actually controls the money to fund the loan and can indeed make decisions without consulting with a third party.  However, many loan brokers represent themselves to borrowers as direct lenders when they are in fact just a middle man between the actual lender and the borrower.  This means that the broker has to collect the information and send it on to the actual lender who in turn makes the decision to fund or not.  This creates delays in getting a go/no go decision.  It also adds another layer of fees that the borrower will have to pay.  The broker will take a fee and the lender will take a fee.  Borrower should make every effort to find out if the lender they are thinking f working with is a true direct lender or is a loan broker misrepresenting themselves as a direct lender.  A direct hard money lender needs to impose stricter terms and higher interest rates than conventional lenders in order to protect their investment. Banks do extensive research into the borrower’s past tax returns, bank balances and reviews all their sources of income and expenditures.  Hard money lenders just look at the property.  Borrowers should also be aware that hard money lenders are not governed by banking laws, which allows them the freedom to underwrite loans that conventional lenders would reject.

Research your lender:

You can often find testimonials and starting terms on the lender’s website. You can also call and ask for references; reputable hard money lenders will be happy to provide you with this information. It can also be a good idea to call with your loan request or to email a loan summary prior to setting up a meeting.

Prove your project’s value. 

Before meeting with a lender, you should be prepared to prove the value and viability of your business plan. You will be dealing directly with the decision-maker; therefore, it’s important to show that you know what you’re talking about and can back up any claims about the value of the property (especially the resale value) with actual numbers. While private lenders require less documentation than conventional lenders, they will still want to see financial statements, especially for income-producing properties. Also, while not usually necessary to close the deal, good credit history can sometimes help influence the interest rate they offer you.

Have an exit strategy. 

The high interest rates of hard money loans mean that it is in your best interest to pay it off in full and on time. Most lenders will want to know how you plan to repay the loan before even agreeing to lend you the money. It’s also a good idea to be diligent in meeting any and all deadlines set by your lender as it will make them more willing to agree to an extension in the event that you need more time.