Investing In Hard Money Loans

Most hard money lenders require the borrower to have skin in the game. They normally require at least 20% to 50% equity. On a hard money purchase mortgage loan, lenders require that the property investor put at least a 20% down payment to 50%.

Down Payment Required on Hard Money Loans

The down payment requirement depends on the following:

• type of property
• experience of the real estate investor
• strength of the borrower

On a refinance hard money loan transaction, the lender requires the borrower to have at least a 75% loan to value or less. Again, the amount lender is willing to extend credit depends on the borrower’s risk and the type of property. Investing in hard money loans can be very lucrative. Investors investing in hard money loans can easily get double-digit annual returns on their money secured by real estate.

Investing In Hard Money Loans For Investors On Purchases

Days of stated-income loans have been gone for many years but are not back. The 2008 Real Estate and Market Collapse has wiped out most fix, rehab, and flip mortgage lenders.

Fix and flip loans are becoming increasingly popular among hard money lenders.  20% to 40% down payment is normally required on hard money loans.

This caused a standstill for real estate investors, real estate developers, and property rehabbers. Many property flippers rely on cash to purchase a property, fix and flip and use the proceeds from the flip to do another project. Now that is not the case.  Many mortgage brokers now offer Flip Rehab Loans.

Short-Term Hard Money Fix and Flip Renovation Loans

Due to Hard Money lenders and Private Money lenders, real estate investors, real estate developers, and property rehabbers can turn to short-term hard money rehab loans for short-term bridge financing throughout the United States. So they can acquire property, fix them, sell them for a profit or refinance them for an end loan and keep them as rentals.

Most hard money lenders require at least a 25% down payment on a hard money purchase loan transaction.

Hard Money Lenders may require a more down payment for inexperienced real estate investors. Most hard money lenders do not normally have pre-payment penalties.

Are All Hard Money Lenders The Same?

All hard money lenders expect an exit strategy on all of their borrowers. Most hard money loans are short-term loans with standard terms being six months to no greater than 24 months. Hard Money Loans normally close in two weeks and are used for short-term bridge financing. Hard Money Loans require little limited paperwork, unlike standard commercial loans.

Investing In Hard Money Loans On Refinance Mortgage

Many property owners have investment properties that have equity but need work or are not bankable due to needing repairs. Banks and traditional commercial lenders will not lend on a property that does not generate any income. Or needs major repairs, no matter how good the borrower’s credit is.  Eric Jeanette of Non-Prime Lenders said the following:

Short-term commercial loan borrowers can utilize the services of a hard money lender or private money lender. Short-term commercial borrowers can utilize the services of a hard money lender to get short-term bridge financing to repair the property and get it stabilized.

Once stabilized, real estate investors can seek the services of an end lender, such as FHA Bad Credit Lenders, and get a long-term low-interest-rate traditional conforming commercial loan.

Exit Strategies of Borrowers of Hard Money Loans

All Hard Money Lenders want to know the borrower’s exit strategy. Hard Money Lenders are short-term lenders. Lenders do not want to keep the loan in their books for the long term.

The hardest money lenders want to keep the loan in their books from one year to three years. Examples of exit strategies may be buying, fixing, and flipping.

Other times may be to buy, fix, and refinance to an end lender and keep the property as an income-producing income property. Other exit strategies may be to purchase a fixer-upper, not do anything to it and resell it for a small profit as a fixer-upper flip to another investor.

Hard Money Loan Programs For Reall Estate Investors

FHA Bad Credit Lenders are short-term commercial hard money financing experts. Unlike other hard money finance companies, we are different than other hard money lenders. This is because we offer full service from originating, underwriting, funding, and servicing short-term commercial hard money financing to helping borrowers with the end financing through its preferred end lenders.

Hard Money Loans are not just for bad credit borrowers. Many real estate investors with high credit scores and good credit will opt for hard money versus traditional commercial loans because of the easy and convenience of hard money lending. It is easier and faster to get approved for hard money loans.

FHA Bad Credit Lenders will assist borrowers in re-establish their credit with borrowers who have bad credit or lower credit scores or for self-employed borrowers. We assist borrowers in structuring tax returns, financials, and profit and loss statements, so borrowers are ready for end financing.

How To Get Started To Apply For Hard Money Loans

For investors looking for a great return on their investments, investing in short-term commercial hard money loans may be a great addition to an investor investment portfolio. We are a national alternative lending network of commercial and residential mortgage professionals. Dale Elenteny, a hard money lending expert at FHA Bad Credit Lenders, said the following:

We have a great concentration of our business in the state of California. We offer no doc fix and flip rehab loans in California. We offer no doc blanket lines of credit for real estate investors in California. Hard Money Financing is a great tool for real estate investors who need fast closings and limited paperwork.

For more information on investing in hard money loans for real estate investors who need short-term hard money rehab loans, please contact us at FHA Bad Credit Lenders at 800-900-8569 or text us for faster response. Real estate investors can email us at gcho@gustancho.com seven days a week, evenings, weekends, and holidays.