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   MONEY LOANS

Hard Money: An avenue for New and Prospective Clients


paperfree Aditi Bansal 29:14
Published on Tuesday, June 27, 2017

Hard money can be a great lending tool that most residential mortgage originators aren’t aware of. Some might confuse it with predatory loans, but hard money lenders support the development of real estate and aren’t difficult to deal with these days.

tags  #Hard Money Lenders  #Prospective Clients #Local Lending

 

Hard money can be used in both the construction of single-family homes and also as a rescue remedy for residential loans that have fallen as a result of low credit scores. Given that hard money is used when securing short-term loans, originators prefer using the hard money on the front-end closing for any long-term loans.

Insights on local lending

If you are looking to partner with investors, it’s important to source a reliable hard money lender to work with. You can do this by trying to source locally since there are great benefits you can incur from working with someone local to finance your projects. Also, it's important that you develop a close relationship with your lender since they play a huge role in their underwriting. In a case where you have a limited budget issue, it’s easier to work out a solution with them given that they operate as a national lender as compared to a mom-and-pop shop.

Local lenders can help homeowners to close a deal more quickly without raising red flags, but they still pose some disadvantages. One of the downsides is that they sometimes run out of funding, which is not the case with national lenders who have institutional backing. For those who are new to the single-family investment, it’s important that you find your local area real estate investors club online.

The funding question

The first question you should ask any money lenders when you meet them is how they get their funding. People make assumptions on where to source cash, but it’s important to understand whether you are dealing with a privately funded lender. Those who might not be privately funded will most likely be using banks or other financial institutions, which is an easy way of saying they have a lot of money. 

Originators know that when clients are handed over to the lenders who are complicated, it’s impossible for such borrowers to trust the vetting process and would seek other alternative options the next time they are in need of a loan. 



This page with a focus on Hard Money Lenders, Prospective Clients was shared by Aditi Bansal.

 
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