You may be overwhelmed by all the information you've seen, read, and heard about hard money loans. Its understandable. Below you'll find some helpful information to answer any questions you may have.
Q: What Is Hard Money?
A: Hard money is a term used to describe any financing option which is an alternative to commercial bank lending. For reasons of timing, deal complication, or risk, hard money lenders can step in to provide funds where conventional lenders cannot.
Q: Why Use Hard Money?
A: Hard money is meant to be short term bridge financing to help you get
into a deal, carry the deal while you work on it, and should be taken out
Q:What Are the Advantages of Using Hard Money?
A: There are several advantages with using hard money. A few of them being:
Fast Underwriting: We will analyze an application same day and either approve or deny the loan on the date of submission
Flexible Programs: You can use the equity you have built up in other real estate to help you purchase and renovate your next project.
Access to Capital: Conventional banks tightened their lending guidelines. Getting access to money has become harder than ever. Hard money is asset-based lending focused on the real estate and the viability of your project as opposed to your credit score.
Q: How Do You Underwrite Your Loans?
A: While underwriting is based on a few key variables and on a case-by-case basis, we have simplified our underwriting process to the following guidelines:
Probability of Success: We want to make sure the borrower makes money. Your success equals our gain. If the financial figures on the deal make sense we will do the deal. If we don't feel the project will be profitably or if the risk (LTV) is too high the application will be denied.
"Skin In The Game": While we are excited to work with all of our new and exisiting clients on their real estate investment opportunities it is their deal, they reap the rewards, and we simply want to recoup our funds. We approve borrowers and investments on level of risk (LTV), because of that, we expect the borrowers to come to the table with cash (collateral) if the LTV is too high.
Plan: We want to know what your strategy is and how you plan to repay the loan.
“The Major Fortunes In America Have Been Made In Land."
John D. Rockefeller