Home
>
Small Business
>
Hard Money Lenders -- No Money Down The Easy Way

Hard Money Lenders -- No Money Down The Easy Way

Would it help you as a real estate investor to be able to "Close For Cash in Days," even if you're tapped out financially?

Hard money lenders are perhaps the best way to get 100% financing with easy qualifying, money for fix- up, and fast closings.

So what can hard money lenders do for you? Hard money lenders make relatively short term (12-24 month) loans to real estate investors for the purposes of acquiring the property and rehabbing the property.

These loans are often funded by pools of private investors that have been grouped together into a pool of capital by a lender.

The hard money lender is looking for maximum return, and is willing to take more risk for this return in the form of easier lending standards.

If you strike the right purchase deal, you can even borrow 100% of the purchase price plus some or all of your repair money by using hard money lenders. Here's how it works.

Hard money lenders typically loan 65% of the ARV or After Repair Value of the property when it is repaired or ready for resale.

That 65% loaned by the hard money lender is calculated based on the value of the property AFTER REPAIRS, not as it currently sits, and not based on the price is being paid for the property.

For example, Say that the owner is willing to sell me his house for $60,000. The hard money lender's appraiser agreed with my assessment that the home could be sold for $100,000 once it was fixed up. That appraisal would allow me to borrow 65% of the $100,000, or $65,000. I'm only paying $60,000 for the property, so guess where that extra $5,000 goes?

Unfortunately, not into my vacation fund!

The extra loan proceeds go into an escrow account held by the hard money lender, and I can draw it out as I do repairs.

Remember, hard money lenders are not concerned with your personal credit to the level that traditional lenders are. They're concerned with the property. They know that their loan is fairly secure if you default.

What's bad about hard money loans?

The fees are higher than conventional financing.

Hard moneylenders in my area charge 15% interest, and 5% of the value of the loan in closing costs ("five points").

Thus, on a hundred thousand dollar loan, there would be $5,000 in fees to the lender to close the loan, plus attorney's fees and other charges.

Secondly, the loans usually are only good for 12-24 months. After that time, you have to refinance. If you haven't sold it by then, you have to get a new loan, pay more fees, etc. These are not loans to buy rentals with.

Another disadvantage is the fact that most hard money lenders don't figure the payments on a 30-year basis. The longer the payments stretch out, the cheaper the payment. They figure these loans on 15 or even 10-year terms. Thus, the monthly payment that you must pay is much higher than it would be on a conventional 30 year amortization schedule.

Also, hard money lenders are often more difficult to find than traditional funding sources. As a gift, I have compiled a national list of hard money lenders at my site to solve this problem for you.

Finally, most hard money lenders require a pre-payment penalty that must be paid if you refinance or pay off the mortgage before a given amount of time. Fortunately, this time period is often fairly short. For example, the hard money lender that I use has a two month pre-payment penalty period. Even if I am not going to do much work on the property, and have a contract on it quickly, I can just set up the closing for after the pre-payment penalty expires.

In conclusion, hard money lenders present an attractive option for investors to succeed without having to resort to the late night TV creative hype that we've probably all been exposed to. If you can qualify for traditional financing, and your seller is comfortable with a longer closing window, you may want to stay with conventional financing.

However, if down payment money is tight and your credit is not perfect, or you need to close very quickly, hard money lenders may be a viable solution since they will allow almost anyone who can find a good deal to purchase a property extremely quickly, with less red tape, get money for rehab, and have virtually unlimited access to cash.

**Attn Ezine/Blog editors/ Site owners** Feel free to reprint this article in its entirety so long as you leave all links in place, do not modify the content and include the resource box. If you do use the material, please send us a note. Thank You!

David Wnisnant is a real estate investor and attorney in Atlanta, Georgia who teaches cutting edge real estate tactics specifically designed to increase the number of deals investors find, increase the profits from each deal with less risk. Download Dave Whisnant's FREE 50 state hard money lender list and forever banish the problem of where to find the cash for your deals! Go to http://www.realestateinvestingbrain.com/freehmlist.html

same day cleaning service Des Plaines ..

In The News:

New Android banking trojan Sturnus steals credentials, reads encrypted messages and controls devices.

Denmark's 3D-printed student village proves automation builds 36 apartments faster than traditional methods. Skovsporet project shows housing future.

Discover Android's new Sound Notifications feature that alerts you to smoke alarms, doorbells, and baby cries even when wearing headphones.

New SantaStealer malware reportedly threatens holiday shoppers with password theft. This Christmas-themed info-stealer targets browsers and crypto wallets.

The Christmas season brings a surge in Netflix phishing scams targeting shoppers with fake emails. Stacey P received convincing scam but verified account first.

San Francisco Giants invite Jamie Grohsong to throw ceremonial first pitch at Oracle Park after he learned to play baseball with a bionic hand following an injury.

FBI warns cybercriminals are stealing family photos from social media to create fake proof of life images in virtual kidnapping scams targeting victims.

Instagram's new 'Your Algorithm' tool lets you control your Reels feed in real time. The app now gives you power to customize what videos you see.

Major Marquis fintech breach exposes 400,000-plus Americans' data through unpatched SonicWall vulnerability, with Texas hardest hit at 354,000 affected.

Free up iPhone storage fast by clearing large photos and videos from Messages app. Simple steps for iOS users to delete attachments without losing chats.

Scammers are flooding inboxes with fake tracking alerts that mimic real carriers, exploiting the holiday rush to steal logins and personal data.

The Fox News AI Newsletter brings you the latest news on AI technology advancements and the challenges and opportunities AI presents now and for the future.

Texas family reunites with missing 11-year-old cat Grayson after 103 days using Petco Love Lost's AI photo matching technology and community help.

Tired of AI customer service loops? These insider tricks help you escape "frustration AI" and get real human help when you need it most for urgent issues.

Unlock richer audio from your streaming apps with simple tweaks to volume normalization, equalizer settings, and quality preferences for cleaner sound.

Scammers are sending fake Facebook settlement payout emails that mimic legitimate notices from the privacy settlement administrator to deceive users.

Holiday shopping scams surge as fake refund emails target distracted consumers during Black Friday and holiday seasons, costing Americans billions annually.

The AI-powered IRMO M1 exoskeleton features four modes, including turbo, eco, training and rest for hiking, running, cycling and sports with eight-hour battery life.

OpenAI announced upgrades for its ChatGPT Images platform on Tuesday, saying the program can now make more precise edits and produce images more quickly.

Chrome for Android now turns web articles into AI-powered podcast conversations. Get hands-free browsing with Google Gemini's natural audio summaries.

LastPass faces $1.6 million fine from U.K. regulators after 2022 data breach exposed 1.6 million users. Password manager failed proper security controls.

Petco disclosed a data breach exposing customer Social Security numbers, financial account details, and driver's license information due to a software error.

Baseball teams can now analyze complete swing mechanics in normal training environments using Theia's markerless AI system that processes standard high-speed footage.

Smart home hacking fears overblown? Expert reveals real cybersecurity risks and simple protection tips to keep your connected devices safe from hackers.

MIT develops needle-free glucose monitor using light technology. Revolutionary device could replace painful finger pricks for diabetes management.

Hard Money Lenders -- No Money Down The Easy Way

Small Business