Why should you use a hard money lender?

After being associated with hard money lenders for the past 15 years, and being one for the past 10 years, this is the new wave of lending for real estate loans. With there being such an overhang of foreclosed properties by banks, and the banks only giving out indirect numbers on what their so called shadow inventory is, it will be a long long time before borrowers can goto banks to get these types of loans closed.

Now, forget about just closing them, what about closing them in a timely manner. That is a whole different point. There are some banks that are looking at commercial loans for as much as 90 days!! That is absolutely crazy to just find out that you have been denied! Think about this scenario:

1. you put an offer in on a bank owned property

2. the bank either accepts or counters your offer

3. you claim to be a cash buyer (when most times you are not)

4. the bank then asks for proof of funds, and you scramble to get a proof of funds letter, when you could just as easily call a hard money lender and get an approval letter from him that he is willing to make a loan to you.

5. you then goto your local bank, with your credit score, 10-20% down, and think that they will close your deal.

6. you have 30 or 45 days on your purchase contract to close. Now your waiting 2 or 3 weeks and nothing from the bank, so what do you do?

7. PANIC!!

the only hard money lender

8. You start calling mortgage brokers but they cant help.

What part do hard money lenders play?

This is where hard money lenders play such an important part. They will not have to look at tax returns, pay stubs, income docs, or any reason not to fund your deal. We will look at the property, the risk in the property, and the probability of getting our loan repaid. We are looking to become loan lenders and get our money back, not be property owners. There are so many deals out there now that can be funded if the borrowers would just understand the days of the good credit scores and low down payments are still in effect. This is where hard money lenders come in.

 

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