How Hard Money Lenders Help with Property Valuation

Many people have earned profits by following guidelines set by hard money lenders, and so can you. Talk to a reputable commercial hard money lender today to get the property you want to buy or sell evaluated. You don’t have to get emotional about property deals anymore!

last updated Wednesday, May 17, 2023
#Hard Money Lenders #Property Valuation

John Burson     Subscribe
How Hard Money Lenders Help with Property Valuation


What's a property valuation? Is it easy to know if a deal is great or bad? Several parameters help hard money lenders understand if a deal is worth investing in, and you can get a hard money loan if you have a great deal at hand. In this post, we'll discuss these aspects in detail.

You shouldn't get excited and buy a property before you can take a deal evaluation sheet or calculator to know its actual value. Deal evaluation is looking at the transactions to know if the property is good or bad. A good deal should offer enough weight or a good profit margin.

Hard money lenders aim to ensure that people purchase properties that are good enough to make money. Commercial hard money lenders will evaluate all the deals that clients present to confirm whether they are getting enough money. Many hard money borrowers are real-time investors who want to buy good properties and still manage to make profits.

From the perspective of hard money lenders, we have outlined some essential elements you should understand before getting a property under contract:

  • Rehab sales price – getting to know the amount the property will likely sell for.
  • Repairs – this is the evaluation of repairs. What repairs must one put into that property, and how much money will be spent?
  • Holing/buying cost is the amount you will pay to access the loan, including the payable interest over the loan's term. Being informed about these periods is crucial since contracts can fall in and out.
  • The selling cost will include your marking, title, and real estate agent fees. It's the amount it costs to sell a property.
  • Market reduction – It involves understanding how the market depreciates annually.
  • Profit is the main aim of doing such deals, i.e., making as much profit as possible.

Hard money lenders work with people who are great at evaluating deals since they want to invest in the value. When evaluating transactions, the experts consider the lowest "sold" and "actives" in a particular area with the same sq. footage. It doesn't matter if it is a short sale or owned by the bank, provided it's in average condition.

In case the property is in a terrible condition, it can be excluded, but in case it is in a livable condition and it's similar in size, you can use it as a comparison. This way, you will know the amount the property will sell for.


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