Investor Hard Money Loans For Fix and Flips
Hard money loans are an alternative to traditional lending and can streamline the way to create cash flow and a high-return by using alternative investment strategies. By way of private investment and hard money loans, you how to earn 10% on annual lending investments.
Even though housing sales are down and prices moderately have risen, steady low rates affirms that now is the perfect time to purchase or refinance a home. This is also the perfect time for investors to buy, fix-up, and gentrify neighborhoods across the country. The home improvement market is a billion dollar a year industry and it’s the ideal time to get hard money loans and a piece of the pie.
The great thing about real estate and hard money loans verses riding the stock market is people will always need a place to live. Therefore, property values should never go to zero. By becoming an investment partner to fix and flip loans you can earn a higher yield and increase your lending portfolio.
There are some legal technicalities that an investor first must understand before applying for a hard money loan:
- The lending process first begins by receiving leads from Daniel’s sister company, Private Lending Group. These leads are generated from previous successful referral partners and an aggressive marketing campaign.
- As a standard, flexibility is given to borrowers with regard to credit score and income because we weigh heavily on borrowers to vest 30% or more of their own money in each deal. Finding out if the borrower has money to invest is the first priority in qualifying a debtor.
- Next, take a look at what neighborhood property is in, loan amount, and rehab budget. Loan to value must be determined favorable for investor.
- Run credit report. Private Lending Group will weed out unqualified borrowers and confirm that they will be able to make the monthly payment.
- Once preliminary approval is given and all required documents are received, the next step is to order title. A BPO or an appraisal is ordered to make sure there are no “leaking surprises”. If BPO comes back clear, title insurance and title policy ensures there are no other liens against property. We will be paid off when they originate to a new loan.
- Closing is set. This is when opportunities to invest are posted for eager investors. The money is sent to the title company with specific instructions that ABCDE has to take place. If instructions are followed, the customers are instructed sign and authorization is given to release the funds.
Some may question why do people pay 10% to a private investor? The answer is simple…ease of loan and speed in which access is granted to funds. FHA government loans are not given for non-occupied properties and there are very few loan products available for investors in America. A hard money loan might just be the ticket.