Finding Hard Money Lenders Is Not As Difficult As You Might Think - They re Just A Click Away

Finding hard money lenders is easy. There are some so-called investing experts that claim the opposite, but in truth there are private lenders out there for just about anyone. One complaint we have heard is that finding funds for rehabbing is difficult. Some say impossible. But, it's just not true. There are as many different sources for funding as there ever were, probably more. When it comes to funds for buying and fixing up that "as-is" property, there are some really good sources. You just have to know what to look for.

Granted, things have changed. At one time the best way to find hard money lenders was by calling up the guy who posts the small ad in the newspaper. Today, more people read the news on-line and that's the best way to find funds for real estate investment. The best companies (and even individuals) all have websites. It's a lot easier to compare the fees that they charge and the loans that they offer. You can even see what kind of information they need to process your application. They usually list their requirements for collateral, loan to value ratios and their repayment schedules.

Change may be the reason that some people think that finding hard money lenders is difficult. There are not as many "no-doc" equity-only lenders as there used to be, but there are still a few. Typically, they require that you own vacant land, in order to lend you money. Why? It's easier to foreclose on an empty lot. Changes in the foreclosure process, renter protection, squatter's laws and a host of other regulations have made it costly and time consuming to take possession of a house. That doesn't mean that the rehabber is out of luck. It just means that there is a little more paperwork involved.

If you want to find hard money lenders for rehabbing and you want them to approve your application, you will need to provide proof of income. They want you to be able to repay the debt. They are really not interested in foreclosing on your property. You might ask what makes them different from a bank or other financial institution. Well, first of all, most conventional lenders do not look fondly on rehab projects. There's no good reason. They just don't.

Second, banks will only loan 80% of what it costs to buy that fixer upper. You will find hard money lenders typically base the available loan amount on the after repair value. They will loan up to 65% of that. That means that if you can buy the house for 65% or less of what it will sell for after repairs and upgrades, then you can get 100% financing from a private lender.

There are a number of other advantages to private financing, but that is the main reason that finding hard money lenders is so important to real estate investors. They know that they will have less out-of-pocket upfront expenses, so they can better control their cash-flow, protect their capital and make more deals. If you are an investor, a private funder might be just the right choice for your next rehab project.

02 Dec 2008 23:58:20

Morgan Stanley buys stake in General Growth - Chicago Tribune

Medill Reports Morgan Stanley buys stake in General Growth Chicago Tribune, United States - Just this week, General Growth announced that a syndicate of lenders has granted it a two-week interim extension on $900 million of debt that came due Nov. ... General Growth gets another debt extension Southpoint owner negotiates loan extension General Growth Properties gets loan reprieve -

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