What do you look for when choosing a Hard Money Lender?

Question

What are you looking for when shopping around for a hard money loan for BRRRR? Also after you do make all of your repairs what are you looking for in the mortgage company that does the refinance?

Chris Seveney · Answer

@Winston Jimenez II

One thing to absolutely ask is does the lender have the money available or do they syndicate it?

There is an individual who has been brought up here in BP and accused of doing hard money loans but not having the money to fulfill the loan during the draws because they turn around and essentially sell the note to someone else to fund the deal but if they can’t sell the note the investor could get hosed during rehab due to lack of promised funds

Account Closed · Answer

You want to have someone you can trust. It's better have to have someone tell you up front that they can't do a particular deal than to have a wannabe tell you they can, then they have to shop around to see if they can broker your deal with a lender. A lot of time gets wasted on "lenders" who can't actually perform. That costs you money and opportunity and people lose their deal spinning wheels with a "fake" lender.

Jose Solis · Answer

Just recently used a hard money lender to fund a BRRR Im doing. I would ask for the interest rates, if it is interest only payments, monthly payments or? How long the loan is for 12 months, 18 months? And how many points are being charged. How quickly can they fund the deal 7 days, 10?

Issac San Miguel · Answer

I think the biggest question I would ask right now, or when vetting - is what are the real rates, points, and timeline to close?

I've taken no less than four calls in the last day from folks whose rate jumped a day or two before closing.

Ryan Deasy · Answer

@Winston Jimenez II

good question. honestly, the biggest thing for me was to work for someone who explained the ins and outs of this type of lending and valued building relationships rather than doing just one off deals. i found that in the HML i use. happy to share more.

Tyler Solomon · Answer

Winston - shooting you a message! Would love to hop on a call to discuss, think I might have some valuable insight here as BRRRR clients are the majority of who I work with!

What do you look for when choosing a Hard Money Lender?

What do you look for when choosing a Hard Money Lender?

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