Hard Money Loans

If you’re one of the people struggling to keep their business or their houses alive amid the many financial obstacles, then you might want to consider hard money loans.

One of the many good things about this is that a borrower’s credit record does not have that much effect on the loan. The loan itself does not depend on the capability of the borrower to pay but on the property’s worth. If the lender sees that the property has a possibility to sell, the loan is good to go.

Traditional lending institutions such as banks do not give loans like this since the risks are pretty high. This is one reason why hard money lenders charge a higher interest rate than that of a bank. They trust the property’s potential and not the borrower’s capability to pay, thus makes the whole process riskier.
Another good thing about this is it doesn’t take long to close the deal. After the lender has determined the property’s value, the process won’t take long. Usually, conventional loans take about three months to get approved, but not with hard money loans. It is called fast cash because it may only take weeks or days to be approved and released.

Investors who are on the flipping houses and rehabbing business can take advantage of this benefit. Real estate investing has never been this easy.
However, they are not the only ones who can enjoy the benefits of this loan. Obtaining hard money loan can give them more time to either sell the property or pay off their mortgage. In a case like this, a borrower’s income and capability to pay off the loan may be taken into consideration.

To successfully get and use a hard money loan, nothing beats a diligent research. Identify if the loan is fit for your needs. Make use of your time wisely in looking for the right hard money lender. Search real estate investing associations and ask for referrals. The internet is also a useful tool in searching for information and lenders.

One site that can be helpful in your search is www.RehabHardMoney.com.

Author: Daniel V. Mc Grey
Article Source: EzineArticles.com
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When shopping for hard money loans online, there are certain things to look for and certain things to avoid. As with any internet transaction, when personal information is requested, the consumer needs to use caution.

The FTC says that con artists have “gone high-tech”. There are numerous reports from people who have been taken in. In many cases, alternatives to conventional financing are the best way to go. You just need to choose your lender carefully. Here, we hope to give you the information that you need to find a legitimate company to deal with.

Many of the companies that advertise hard money personal loans online are payday lenders. While the payday loan is not a true scam, the fees that the companies charge are equivalent to yearly interest rates in the double digits. This type of loan is not the right choice for anyone who has an option, but is definitely wrong for the real estate investor. If you are new to investing, looking to buy, build or flip a property, you should be looking for lenders that advertise rehab funding, construction loans or something similar.

Brokers are another group that advertises hard money loans online. If you use a broker, you are paying him or her to go out and find financing for you. They may or may not be able to provide this service. Avoid the ones that ask for large up-front fees, anything more than a few hundred as an application fee. There have been reports of consumers that paid thousands of dollars to brokers that “guaranteed” financing. Not only was there no loan, they lost the money that they paid to the broker.

Legitimate companies offering hard money personal loans online rarely list their services with a broker. They can do their own advertising. They may have associates that refer clients to them, but the consumer does not pay a fee for the referral.

Remember that anytime an online site asks for credit card or other personal information, they should be a registered secure site. They should have a complete privacy policy available for your inspection.

It is much safer to use a lender that has you send your information to them by regular registered mail, rather than e-mail. They might request a copy of your credit report, but they would not need your credit card numbers. You might feel like regular mail is slower, but it is safer. You could always send the application overnight. You can get pre-approval while you are still looking for the right property, so there is no real need to rush. Not all companies offering hard money loans online have a pre-approval program, so look for one that does.

Currently the FTC lists no complaints with hard money lenders, though there are many with payday lenders, but if you have a concern about a specific company, you can check Federal Trade Commission’s website (www.ftc.gov) and run a search for the company name. If nothing comes up, then no complaints have been filed with that company.

You can definitely find hard money personal loans online, you just have to know where to look.

James has been in real estate for over 30 years and is an expert on residential and commercial hard money loans. He is a regular contributer to Hard Money Guide, a comprehensive resource for those looking to secure funding for real estate projects.

Author: James Whitmore
Article Source: EzineArticles.com
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With residential foreclosures on the rise in the US, many homeowners are finding themselves in situations they never though they would be in. With adjustable rate mortgages coming out of their fixed period, the opportunity to refinance into a secure loan has diminished as lenient lending policies have become a thing of the past. Additionally, individuals who have been previously classified as “sub prime borrowers” are now finding it more difficult than ever to refinance.

With borrowers who have previously provided little or no documentation, where would they go today when times get tough? Mortgage banks today are being extra cautious even with borrowers who achieved levels of creditworthiness. Private lending companies are emerging to satisfy clients who fall into these cases.

Hard money loans traditionally carry higher interest rates than loans made from banks. Many times they require that the borrower have a certain amount of equity in the home. Many hard money and private lenders will tailor the contract and agreement to make it a beneficial solution for all parties involved.

Hard money lenders in the past have developed a negative reputation for “loan sharking” money at high interest rates and seizing properties should the borrower fail to make a payment. Today, a hard money loan might make the difference in being able to stay in a property and prevent a potential foreclosure.

When used properly, a private mortgage loan can buy a borrower the time to make necessary life and financial changes to prevent a foreclosure from happening. A hard money loan today can be a very useful tool and a life saver for a sub prime borrower from losing their home.

Before accepting a hard money loan, keep the following in mind:

1) Research a few hard money lenders in your area and discuss your situation and the terms of the loans being offered to get a sense of the market and how you fit in.

2) See what a few lenders are offering you and be prepared to negotiate. Every dollar and fee is important and needs to be understood. Remember, these loans are negotiable as it is mutually beneficial for both parties.

3) Do not accept a loan amount greater than you need. You will be more likely to spend that money (which comes at a much higher interest rate) and have to pay it back over the life of the loan.

4) Involve your accountant and real estate attorney. They may put you in touch with a reliable company that will not put you in a more difficult situation if things should turn for the worst. Their relationships and referral volume may end up getting you a great deal.

5) Private lending is a profitable business and lenders are always looking to mitigate their risks while helping others. Be honest and upfront with the loan officer regarding your situation. It may be the difference in getting a loan with a lower interest rate and more favorable terms.

Your story is important to the loan officer so being truthful is key. As borrowers are approaching foreclosure many feel their pride is at stake and are embarrassed and ashamed about their situation. Being proactive and honest as a borrower is the first step on the road to financial recovery and hard money lending today is becoming a popular and useful solution.

Nicholas Cuttonaro is a successful mortgage professional and publisher of http://www.MortgageLoanDetails.com

Author: Nicholas Cuttonaro
Article Source: EzineArticles.com
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Financing for commercial real estate is a completely different game when compared to residential mortgage loans. It moves much faster and is much more flexible.

Commercial Real Estate – Hard, Hard, Hard Money Loans

When purchasing commercial real estate, financing is the most significant factor in determining whether the project is worth pursuing. Although there are a variety of commercial real estate loans on the market, we are going to look at hard money loans in this article.

Hard money loans for commercial real estate are often a matter of last resort. They aren’t good deals, but they can save a financing situation that has gone critical. Most hard money loans come with significant upfront costs and astronomical interest rates. When you are facing the prospect of losing a commercial property, however, they can be a godsend because they also are granted very quickly.

Hard money loans are considered very risky and are issued by private financing groups, not banks or lenders. The loans tend to be only available as the primary loan on the property, which isn’t that rare a situation in commercial property.

Unlike home loans, hard money loans are all about the potential sales price of a piece of commercial real estate. The party considering lending you money is not going to look at the appraised value of the property. They are going to look at the probably sales price if the commercial real estate has to be sold a few months after making the loan. Depending on the condition of the property, this figure will typically be between 50 and 75 percent of the appraised valued of the commercial property.

Put another way, a hard money loan is a short-term loan designed to get you past an immediate problem. It is undeniably a loan of last resort and is not an ultimate solution to a financing problem with a commercial property. It does nothing other than buy you time, and at a fairly hefty cost. If you are in a tight spot and can resolve the problem with a few extra months time, a hard money loan may be the answer.

Sergio Haros is with Great Western Mortgage – San Diego Mortgage Brokers – providing San Diego home loans. Great Western Mortgage is a San Diego mortgage company writing San Diego mortgages and San Diego refinance and home equity loan.

Author: Sergio Haros
Article Source: EzineArticles.com
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Private lending is an alternative to conventional loans such as you would apply for at your local bank or Mortgage Company. They are also referred to as Hard Money loans. Private loans are short-term loans ranging from 3 months to 3 years. They have a quick approval time line and usually a 55% to 75% LTV (loan to value) rate. This is a great option for residential, commercial, construction, and land investment purchases that are expected to have a fast turn around.

There are a variety of Hard Money loans:

-Hard Money Acquisition Loans – This type of loan is used to acquire real estate using the loan proceeds.

-Mezzanine Financing and Loan – This is a loan subordinate to a Primary Lender. This is a debt instrument, which is paid back at the time of sale or refinance of the total capital stack. Mezzanine loans have flexible structure, including debt and equity mixes that can increase the borrowers leverage.

-Hard Money Acquisition and Development Loan – These loans are used to acquire and develop property with the intention of improving it. The loan proceeds are dispersed with interest only paid on the funds Distributed. The loan amount is determined by the overall LTV Expected following the improvements.

-Asset-Based Hard Money Loan – This can be used for any purpose. Collateral is put up for security. Collateral may be property, equipment, inventory, etc.

-Hard Money Bridge Loan – This is money that is used for only a short period of time until permanent financing is put in place. This is a perfect solution for a business opportunity or acquisition that needs a quick process for financing. Circumstances that may be considered are Buy-Outs; foreclosures; construction; hotel and motel; office complexes; commercial business opportunity; apartment buildings and even golf courses.

-Hard Money Construction Loan – This money is used for the construction of a building or other improvements of real property. The land or the improvements become the collateral for the loan. Some lenders will loan up to 100% of the cost of construction available depending on the determined value upon the completion of all improvements.

-Hard Money Credit Enhancement Loan – This loan is for a borrower who lacks the credit or capacity to acquire a conventional loan of sorts.

-Hard Money Raw Land Loan – This can be used for lots to large acreage. The LTV ratios are determined by the price it would be valued at a 90 day quick sale.

The key to Hard Money loans is the ability to do a quick turnaround in your sale of the property purchased, or speed in which you are able to acquire a more permanent long term financing.

Blue Light Financial is a private lending group aimed at helping investors take advantage of market opportunities in a timely manner. With a sound investment strategy and a determination for excellence, Blue Light LLC has been solving client’s financial needs for over 28 years. For more information about investing with Blue Light LLC, please visit our website at the following link: http://www.bluelightfinancial.biz.

Author: Ginese Wilmot
Article Source: EzineArticles.com
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A Commercial Hard Money Loan isn’t for everyone. But it could be a viable solution for someone that can’t get an everyday traditional Real Estate Loan. Of course with this type of loan Real Estate is always the collateral, with no exceptions. If for some reason the buyer defaults on the payments, the bank can repossess the property in due course of course, no pun intended.

The basic inference of the various types of Commercial Loans can also be defined as Sub-Prime Lending, Near Prime, B-Paper or Second Chance lending options.

So seriously would someone take out a Commercial Hard Money Loan verses a standard Commercial Loan? It’s because there are determining factors such as Slight Credit Score, Enterprise Stability, proven absolute Income Level that would curb someone from getting traditional money financing or custom rates, so the defaulter in these cases will compromise for what they can get.

Some companies have a lowest amount they will lend you when helping you get a Commercial Hard Money Loan. The companies we have researched start out at $300,000 and go up into the millions for Commercial Real Estate Properties.

There are also what they call Mezzanine Loans which is a loan that’s paid back behind the sale or refinance of the Commercial Property. It’s possible for a lender to secure a portion of the proceeds upon sale of the Hard Loan debt. These loans tend to have suitable structures such as good debt and equity ratios.

There’s also a Financial Loan called a Hard Money Bridge Loan. These types of Money Financing solutions are usually temporary until a more permanent solution comes into play. These are used when time is of the essense, when a business move needs to be made quickly to acquire a property. There are no upper limits on this type of loan, and the qualification requirements usually remain the same.

There are also Hard Money Construction Loans, which is another distinctive Money Financing option that can be applied to for limited home projects to larger Commercial Property projects such as the development of a strip mall or tract home development project. In most cases for construction projects there is a reserve account setup to make sure that money is allocated properly as the project keeps moving forward.

A Commercial Hard Money Loan is typically used in both Urban & Suburban areas. The current Prime Rates are from 11 – 16% verses the 6-7% for a standard loan. Usually all associated Points & Fees are included in the loan and payments from these are dispursed upon closing the loan. Also note these are Short Term Real Estate Loans that are usually given from 1-3 years.

It is always comforting to know that there is big money available to you when you need it in the form of a Commercial Hard Money Loan. This article went over the main types of loans and how they can benefit you. However beware of the common Predatory Lenders that lurk in this industry. Expect to pay 11-17% for a Real Estate Loan like this. If you are asked to pay anymore more, imho you are being taken to the cleaners. So before you jump into anything like this, just do your research and you should come out okay.

Author: Brian Garvin
Article Source: EzineArticles.com
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Some of the more sophisticated real estate investors try to avoid hard money loans due to the high interest rates. However, a hard money lender may prove to be beneficial for the right type of property. Many individuals will be surprised to learn that a large amount of successful real estate investors often turn to hard money lenders. A hard money commercial loan is an asset based loan in which the borrower receives funds secured by the value of the real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial property loans and are almost never issued by a commercial bank or any other institutional lender. A hard money commercial loan is simply an advance for a commercial venture for which conventional funding is not available. It is money that is difficult to get elsewhere. The purposes for which these loans can be obtained include property acquisitions, construction, investments, business and industry refinancing.

There is a greater need for suitable collateral to obtain a hard money commercial loan. Appraisals from a third party on the collateral may not be necessary because a hard money financier may be experienced enough to assess the value of the property. However, in most cases an appraisal is warranted. Commercial hard money is similar to traditional hard money, but may sometimes be more expensive as the risk is higher on investment property or non owner occupied properties. Commercial Hard Money Loans may not be subject to the same consumer loan safeguards as a residential mortgage may be in the state the mortgage is issued. Commercial hard money loans are often short term and therefore interchangeably referred to as bridge loans or bridge financing.

Hard money interest rate is not dependent on the Bank Rate. It is instead more dependent on the real estate market and availability of hard money credit. As of 2007 and for the past decade, hard money has ranged from the mid 15% – 25% range. When a borrower defaults they may be charged a higher “Default Rate”. That can be as high as allowed by law which may go up to or around 25% – 29%.

Hard money lenders can be approached directly online or through brokers. In either case, shopping around and comparing the rates and terms would be important. The main consideration in taking a hard money commercial loan is whether it would generate enough money to comfortably service the debt. A sophisticated investor knows how to look for undervalued properties and negotiate a great price especially if the seller just want to relieve him/herself of the property. If you find a great deal on a property, weigh your options and do your calculations to determine if it would benefit your in obtaining a hard money loan.

Author: Varondria Williams
Article Source: EzineArticles.com
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If you are flush with funds and are seeking to find a good investment venue where you could deposit your capital, you should be looking at investment opportunities that would surely provide good and secured returns. Why not invest in a hard money specialist? Check out Coastal La Jolla Funding and see how the company could provide you with a good investment chance. Coastal La Jolla Finding is specifically known as a provider of hard money loans. The business is at the bullish side because more borrowers are filing loans at the company.

You know that hard money personal loans and poor credit loans are implementing significantly higher interest rates. That is a usual market practice and is legitimate. That is because such loans are posing greater risks to the lenders. Borrowers of such loan facilities are usually on the desperate side to accept and conform to the high interest rate provisions. That is why hard money loan specialists are also earning more than conventional loan providers. In fact, among the fastest growing financial firms not just in the United States but all around the world are hard money or poor credit loan providers.

That is a good reason why investors flock to hard money loan providers. Like most financial firms, such entities are welcoming investments because doing so is helping them expand and broaden their overall capital. Hard money loan providers know that to be able to attract and motivate investors, good investment rates and returns must be secured and provided. As an investor, it is logical that you aim to place your investments and resources at venues where they can grow to the fullest.

At Costal La Jolla Funding, you can be rest assured that your money would be productive. Some current investors even assert that their investments in the company are earning better that in any other venues. Investments in such loan providers are comparatively faster paced and more yielding than those at equities and other opportunities.

The sub prime mortgage lending sector is problematic during the current times. But Coastal La Jolla Funding sees this slump not as a setback but as an opportunity to further grow businesses. By sticking to such loans and to hard money loans, the company is proving that bad times could be converted into the best profit generating moments.

How can you be assured that the company would not fail? First, Coastal La Jolla Funding has strategies to secure itself and the hard money loans it provides. The company takes some equities to the mortgage loans and several other assets of the borrowers. Thus, no matter what happens, the company is holding security and is ensured that losses on loans even if borrowers become delinquent would not be incurred.

There are also existing legal contracts that are binding the company and its borrowers. Thus, there is a great assurance that the loan facilities are tenured and secured. Before making and placing the investment, you would be oriented to the basic company operations. If you would have any queries or doubts, you could easily raise your concerns and the company would be quick to address those issues.

There would also be secured contracts between you and Coastal La Jolla Funding to give you peace of mind over your investments. You will have the option on the frequency and terms of your investment. If you want, you could opt to collect returns annually, bi-annually or whatever term period you may like.

Investing in Coastal La Jolla Funding can also be considered a good deed and advocacy. If you want to help out financially needy people, investing in the company could be a good revenue and at the same time profitable. You know that most consumers nowadays are finding it hard to secure much needed and necessary loans. Hard money loans providers like Coastal La Jolla Finding is are somehow helping them raise money for their urgent needs for investments, startup businesses and even personal matters.

Author: Tim Doscher
Article Source: EzineArticles.com
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I’m also known as the Pitbull which is a name I was given many years ago by my friends and competitors due to my tenacious business approach. Somehow the name stuck throughout the years and I accepted it as part of my persona. My business career has spanned over 30 years. In the 80′s I was an anchor on the Financial News Network. Perhaps you remember me from my nightly reports. After the network was sold to CNBC I was offered to host The Leonard Rosen Show, which was nationally syndicated. In the 90′s I became the CEO of a large medical group. We specialized in the treatment of chronic obesity. Our focus was to provide medical services to our patients and provide a hard money loan to finance their treatment. This was a huge success, and is what opened my eyes to the hard money business.

We train loan officers, mortgage professionals, Real Estate Investors and hard money lenders how to succeed in the hard money business. If you are interested in a career in mortgage lending, our hard money school is a must for every mortgage broker and industry professional. Pitbull mortgage school is much more than a loan officer school providing loan officer training. In order to compete in the competitive environment of mortgage brokering, you need to learn all the aspects of hard money lending. Pitbull mortgage school is the definitive answer to a high income career in mortgage banking. Our California based hard money seminar series has trained mortgage professionals, loan officers, and attorneys in the lucrative field of private financing.

I host the most powerful and dynamic seminar on hard money lending that has ever been taught.

I teach the secrets and techniques of the hard money mortgage business to brokers all over the country. My students learn more in the first 45 minutes than most brokers have learned after 20 years in the business. The tuition of my seminars ranges from $395 to $695 depending on the venue. If you can’t get away, you may be interested in purchasing my DVD which was filmed at our seminar at the Monte Carlo Hotel & Casino in Las Vegas on February 7th 2007. This seminar was a tremendous success and sold out with standing room only!

I hold nothing back, Everything is disclosed!

You will receive the actual names, phone numbers, and contacts of my preferred hard money lenders.

This seminar is a must for any loan professional who desires to earn $500,000 or more in the hard money business. I know no other industry that affords more potential to earn in excess of $500,000 per year.

My experience tells me that most loan officers and mortgage professionals never even come close to reaching their potential in the hard money business. The reasons are simple- they spend most of their time spinning their wheels instead of converting their time into what I call revenue producing efforts. You need to know what to ask the borrower to flush out the real information. Then you need to learn how to manage and control your borrower through the process. And most importantly, you need to know where to place the loan for funding. Most brokers never get their loans funded. No funding, no commission. This seminar will teach you the specifics of how to get your hard money loans funded.

The Pitbull Mortgage School teaches you specifics not hypotheticals.

Here is a sample of what you will learn:

- How to do mezzanine and conduit loans.

- How to start a hard money mortgage company.

- How to ask the right questions of the borrower

- How to manage your borrower

- Where to place your loan scenario

- How to determine the real value of the property (the Pitbull Hard Money way)

- How to package and sell your loan to the investor

- How to do raw land deals, commercial projects, foreclosures, NOD’s and real estate development projects

- How to assess an appraisal that will lead to funding the loan

- How to earn 4 to 5 points on a first trust deed

- How to do second mortgages and make money doing them

Who knows the term hard money?

Hard money is private money lending, money you will receive from individuals that will loan you their money against your real estate, hard money lender is the bank and the bank will Loan you their money and put a lien against your real estate, the same with hard money lenders.

What is the difference between the hard money lender’s programs and the bank across the street?
1. Hard money lenders can help investors with large loan amounts, while banks will make it very difficult on the borrower to loan these large amount, so the loan would probably end up with an insurance company to loan the money and the requirements are high.
2. Hard money lenders can fund any hard money loan within a week, while for the banks it will take at least a month or even more.
3. Hard money lenders will ask for very little documentation, while the banks would ask for almost everything you have, taxes, income, assets, history of the property before and plans for after the purchase, business license, basically they will definitely want to see more from you to loan you some money.
4. Hard money lenders have guidelines but they can make exceptions without processing it through a whole underwriting team- while the bank need to go through different departments and underwriters and processors just to make an exception, and then the exception will not get excepted.

As you see to get a hard money loan is much easier then to get a loan from a bank because of the whole process, the banks are big companies and big companies have many different rules inside their companies, and to get an exception for these rules is almost impossible, and that is why many investors would rather go with a hard money lender.

So now you’re probably thinking what is the catch with the hard money lenders?
OK, so let’s talk about all the reasons why you should not consider applying for a hard money loan:

1. Hard money lenders for their services will charge you 4 to 9 points on the loan- while the banks will charge you only 1 to 2 points.
Example: If you have a loan amount of $1,000,000 and your hard money lender will charge you 5 points up front then you will pay $50,000- while the bank will charge you 2% which is $20,000, that is a bit difference but under different circumstances for some people it’s still a great deal.
2. Hard money lenders because of the fact that they will loan you money without showing your credit history and your income they will set the loans interest rate 9%-15%- while the banks will set your loans interest rate to 7%- 10%, again that is a huge difference if you’re thinking about it but for these people that want the hard money loans it’s still a great deal.

You have to understand that most investors or home buyers can not qualified today with banks for any type of Loan, hard money lenders can get you the deals you want (foreclosures, reo’s) without even thinking about showing all the unnecessary documentation, all you need to have is some money in your pocket if you’re purchasing, and if you’re refinancing then you need enough equity since the hard money lenders will probably go up to 65% at the most, also to find good hard money lenders it’s not so hard, it’s actually very easy because there are many private hard money lenders that are looking for real estate properties and notes to buy so they can make their points up frond and of course the high interest rate, if you will think about it, it’s much better then put the money in the bank.

Example: If a hard money lender put $1,000,000 in the bank and the bank will pay him 5% a year- while if he will loan the money to an investor that want to purchase a property or to refinance a property, he will charge his 5 points and he will get 15% interest rate on his money, that’s a big difference.
Good luck to you all investors out there.