California Hard Money Lenders: Los Angeles Hard Money Lenders

Showing posts with label Los Angeles Hard Money Lenders. Show all posts

Tuesday, 7 July 2015

Hard Money Loans vs Bank Loans

Hard money loans are much different from traditional lenders and banks. One of the best ways to understand hard money lenders and the private investor loans they offer is compare them. The following table below shows parties, processes and terms common to one or both types of lending and compares them in relation to each other.

Party/Process/Term	Bank Loans	Hard Money Lenders
Agent	Typically sells real estate but might originate loans as well if licensed by their state and registered federally as a Mortgage Loan Originator.	Used rarely unless the sale of real estate is involved as part of the loan transaction.
Broker	Licensed as a real estate broker. Agents freeze their license with a broker. Typically the highest licensing designation.	Same as bank loans
Loan Officer	Normally an employee of a bank, mortgage broker, mortgage banker, or large commercial lender who originates loans. Licensing requirements may vary depending on the type of institution and their state and federal licensing.	Not a term used by hard money lenders.
Loan Broker	Same definition as Mortgage Broker.	A licensed broker specializing in brokering hard money loans.
Mortgage Broker	Works with 3rd party institutions to search conventional loans in order to meet your needs.	The term is used rarely because they are typically offering their own loan products so there is nothing to “broker.”
Mortgage Banker	Normally works along 3rd party institutions to fund loans but will primarily fund with their own money or through a pre-arranged credit line.	Loans funded with their own funds, a pool of funds they manage, or line of credit.
Hard Money Lenders	N/A	Broker who runs a specialized business dedicated to originating private money loans. These people are often referred to as private money lenders.
Programs/Guidelines	Set as per government agencies like: Fannie Mae, Freddie Mac, FHA, VA, USDA, State Housing Agency, and some in-house “portfolio” lending programs.	Hard money loans are customized to borrower’s needs based on loan and collateral criteria such as LTV and DTI. Typically it is more flexible and faster than Conventional lenders.
Borrowers	Good credit history with easily documented income sources.	Non-traditional income and self-employed sources are accepted. Income is analyzed differently and possible exceptions are made for past credit flaws.
Eligible Property Types	Single family homes, 2 - 4 unit and some other types of commercial property.	Other properties that fall outside of the conventional parameters like rehab loans, construction loans, bridge loans, occupied rentals used to secure startup capital for new ventures.
Vesting	Always in the individual borrower’s name.	Is more flexibility and generally permits vesting in trusts, limited partnerships, Corporation, and LLCs.
Due Diligence	Minor to none. Review of initial disclosures and final documents at signing with terms expected.	Extensive research of collateral and borrower’s entity is done. Personal guarantee and Opinion Letter is generally required.
Loan Costs/Closing Costs	Normally 1 - 2% of the total loan amount.	Can be as high as 3-10%, depending on the loan amount.
Servicing	Handled by the institution who have originated the loan. Often, one institution will sell the servicing rights to a larger firm which specializes in servicing.	Typically the private money lender who originated the loan, or a smaller servicing company.
Non- Monetary Loan Covenants	Covenants are required to be met during the loan process. Covenants vary by lender, but typically include financial reporting, and the maintenance of various ratios like; loan to value and debt service coverage ratios.	Similar, but may be more strict, depending on lender.
Interest Rates	Rates are typically competitive between lenders, and are generally lower than private lending. Most customers turn to private money loans not for the rate, but because the loan is otherwise unavailable.	Rates start at 8% and go up based on unique criteria of each

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.

Friday, 3 April 2015

Borrowing from Hard Money Lenders for Real Estate

Looking for quick loans appears to be an excellent opportunity for the real estate investment deal means that you cannot get money quick enough from the local lender. You have a limited time to close a good deal but also need a way to come up with the cash to complete transaction. You need to find hard money lender to get funds quickly.

If you are in urban area and you know that there are real estate clubs around. There doesn’t seem to be any other choice so you have to see them, keeping in mind that they may be willing to help you if it is a good one. Private investors could deliver the money within as early as five days.

It is important when dealing with private investors is to show them that it is a good deal, doesn’t matter if you are not able to pay them back. For any reason if this happens, there has to be a considerable equity in the property, which will enable them to earn profit even if they have to take the property back from you for lack of payment. Even after that, you will be able to borrow only 65% of the property’s value after it has been fixed.

A big part of their consideration of hard money loan is the value of property, not your credit score. Usually they look at your credit score, the biggest factor is the collateral. As they are in for money, they are pretty sure that they will make a profit even if you don’t. But if you handle it in a right way, your investment in a good deal should also yield you a lot of profit back to you too. The amount of profit you will get depends on your expertise in real estate transactions, the market analysis, and of course the amount of interest you pay to the hard money lender.

It is also very important to know the difference between hard money broker and hard money lender. A hard money broker is a middle man between borrower and the lender. They usually charge a fee upfront to put you in contact with some private investors and it may not be refundable. However a private lender has their own money and they will use to help you finance the deal.

First the California hard money lender will evaluate the property before agreeing to give you a loan on that property. It is your responsibility to ensure that the amount you have asked for this is in line with the typical private investor’s expectations. Learning how to do this will come with time, and from talking with other people who frequently deal with hard money investors. Remember that they are in it for a profit too.

Wednesday, 17 December 2014

Direct Hard Money Lendres For Concord Real Estate

Hard Money Lenders are private companies and individuals who lend out capital to fund real estate deals. The loans are called "Hard Money Loans" or "Private Money Loans" is a significant source of financing for real estate investors who need short-term access to funds.

Hard Money Loans

Getting Hard Money in California:

Hard money lending in California is just as popular as it is in most other areas, particularly with property buyers. You might wonder why credit seekers decide on direct hard money lenders over traditional loan associations. You may often hear or read that private funders demand extra or that they are known to be a last option for funding.

The truth is that Concord hard money lenders offer many services that the banks and traditional lenders simply cannot or will not. They approve loans quickly. They understand the needs of the investor, since most of them have invested in real estate. Some of them are even considered specialists, a good choice for the rehabber or reseller. The fees that they charge are reasonable, for the most part, but to get the best deal, you should shop around.

Advantages of getting Concord Hard Money:

Unlike other lenders, we will not leave you wondering for weeks if your request will be approved; we let you know within days (most likely hours) if we are interested in working with you. And since we are a direct lender and underwrite our own loans, your loan will close fast and without the hassle and headache we hear about so often from other lenders.

If you are an active real estate investor/borrower and have multiple commercial or residential properties with equity in California, I would love to hear from you. Just fill out my simple prequalification form and we’ll get back to you within one business day. We value your business and I look forward to funding your transaction!

You will find that Concord hard money lenders are competitive. They want your business to flourish, so they advertise. One of the best ways to choose a provider is to simply evaluate their website. Look for the ones that detail their approval process, repayment plans and additional services. The more up-front they are about what they have to offer, the more likely it is that you have found a reliable legitimate source of funds.

Tuesday, 9 December 2014

Two Major Benefits of Hard Money Lenders


California Hard Money Lenders

You have just started your business by using bank loans, monthly savings, credit cards, lines of credit,

You are not happy about how long the banks take to get the loan. It takes upto 4-1/2 months on a house without a furnace. The banks did not know if they wanted to make a loan on such kind of house, but that rehab business is all about. Buy them ugly, cheap and fix them. If you would have used a California hard money lenders on the above deal, you could have bought, fixed & sold the property and saved $20,000 by the time to the closing table with the banks.

With private money lenders, funds are available the whole time. When you see good deal that comes in my way, grab it, because you know the money is for you. While your competitors are searching around applying at the banks, you have made the offer and closed the deal. Your rehab crew will be over the property like ants before the competition which knows what happened. You would love having private money lenders for my business.

So, a major benefit is How Quickly you purchase a property.

Creative techniques with sellers (like land contracts or lease/options), and partners. You are more concerned that it is going to be harder to get loans to purchase the properties.

This is a huge benefit... Just think about what this has done to improve my balance. Now you will always get monthly payments . So the second major benefit is improved cash flow because now you do not have to make monthly mortgage payments but just let the interest accrue.

For more information feel free to Contact

Tuesday, 2 December 2014

California Hard Money Lenders | Recently Funded Properties

Hard money lenders are private individuals or small firm that lend money based on the property that an individual is buying and it is not your credit score. These loans will cost you more than an average loan. Developers among other will use it to fund deals as you can borrow up to 100% of your purchase price. On the other, hand hard money lenders will suggest you to back up your loan with the real assets. If you know you can buy a property and turn it quickly at huge profit, and you cannot get a standard mortgage. It would be one way; most of the investors use hard money to get into the property having some quick fixes to raise their property value.

The good thing about California Hard Money Lender is that the loan is normally not based on credit score (like local lenders) or at least not on your credit worthiness (i.e. assets and income), now you can receive funding within a matter of days (normally about 7-14 days) rather than over a month, and you can get a loan on any piece of junk that you find. You also are not normally dealing with a processing team. You deal directly with an individual lender. If he or she says yes, then you have the loan. This is an advantage over, going through an entire process of loan committee or underwriting process.

Recently Funded Properties

Here is a list of recently funded properties