Hard money borrowers secure their loans through equity rather than creditworthiness. These types of loans are referred to as equity-based loans. Hard money lenders are primarily concerned with the collateral used to secure the loan, which is often the property that the funds are used to purchase.
Real Estate investment FAQ’S
What are the Qualifications?
Minimum 600 credit score
Documented income sufficient to cover loan payments
No bankruptcy in past 3 years
Legal resident of United States
Primary residence within 50 miles of subject property
Sufficient liquid assets to cover your percentage of capital needed for the project
How much can I borrow?
Most lenders will finance 75% – 90% of the repair funds and 75% – 90% of the purchase price, up to 70% of the after-repair value.
How much do I need to put down on the proyect?
Generally, you will need to put down 10% – 20% of the total project cost.
Will you lend to an LLC, partnership or corporation?
Yes, however personal guarantees are required.
Will the lender consider joint ventures?
Yes, on a case by case basis.
How fast can my loan close?
Once a borrower has been approved, closings can be held within two days of receipt of the appraisal, inspection report, and title binder.
Is any any additional collateral needed?
In most cases, no as long as all requirements are met.
Is there an application fee?
No, we don’t require an application fee, yet we do collect an upfront deposit for appraisal and inspection orders.
How do you dertermine the value of the property?
The property value is determined through an appraisal or broker’s price opinion (BPO).
Does lender provide proof of funds letters?
Yes, lenders do provide pre-approval letters.
Can I Pay off my loan early?
Yes, there are no pre-payment penalties.