Rehab-Real-Estate: Tips on Borrowing From Hard Money Lenders
Author: Carrie Dawson
Author: Carrie DawsonHouse rehabbers often seek funding from hard money lenders to finance their deals. Also known as
http://www.rehabhardmoney.com" target="_blank" title="http://www.rehabhardmoney.com">private lenders, these financiers make sure that you can proceeed with your real estate investing deal even if you are short in personal money. Here are some things you must know if you plan to tap this kind of financing.
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Always go for the good deals. If you doubt that you will make a lot of money from a particular rehabbing project, let go of it. There are scores of cheap homes you can buy and rehab out there. This is important because that property will be your collateral when you seek hard money loans. If lenders see the potential of the property you want to flip, then your loan application is likely to be approved. But if they feel that you will not profit from it, they will reject your application.
The amount you will get will depend on the ARV, or after repair value of the property. This is the value of the property after you rehab it. Hard money lenders usually lend between 60% and 70% of the ARV so the higher your after repair value, the bigger the money you will get. You can seek the help of a professional appraiser if you do not have the experience in extimating ARV.
You must learn to find hard money lenders the right way. The most convenient way to search for private lenders is through the Internet. Just type hard money lenders and you will find a lot of them online. You can also try typing rehab hard money, which means that you are looking for hard money financing for a rehabbing project. You can also find private lenders through referrals, the classified ads, and local real estate clubs.
Be prepared to pay a higher interest rate. Private lenders use interest rates that are twice that of traditional lenders impose. Despite this, rehabbers and other real estate investors still prefer using hard money financing because it is more convenient. These kinds of loans are released in just days. Banks and other traditional lenders, meanwhile, usually take a month to process applications, especially those concerning large amounts of money. Applying for hard money financing is easier since borrowers do not have to secure so much financial documents. Remember, hard money lenders care about the deal you are presenting and not about your credit score.
Read and watch more about this kind of financing and other useful information for rehabbers at http://rehab-real-estate.com/" target="_blank" title="http://rehab-real-estate.com/">rehab-real-estate.com today. About the Author:
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