Do hard money lenders work in rural areas?

Question

Why is it so hard to get Hard money on small towns, what recommendations do you guys have to find one that will work with you and does anyone know of a hard money lender in Texas that will do loans on rural areas I'm in the Texas panhandle area. thanks in advance.

Michael Glist · Answer

Yes it is possible to get a HML in a rural area. The big thing you may find is their maximum loan to value will likely be lower due to it being rural.

The question a lot will have is, is it rural due to it being a small town or is it rural because it sits on acreage? This is important because if you are looking to flip the property or even turn it into a rental the long term financing get trickier when there is acreage.

Michael Kinsella · Answer

Hi @Fabian Marrufo,

1. It's more difficult to ascertain an accurate value because there are generally less comps.

2. There's generally lower market velocity, so in the event that a HML needs to take back a property and sell it, the process is far more difficult.

You might try to find a local HML as opposed to a national one, or even a private lender with less sensitivity to the rural location.

Best,

Michael

Do hard money lenders work in rural areas?

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