Who has been your Go-To Hard Money Lender?

Question

Good evening friends!

There has been a lot of rate volatility this past year and we've seen many lenders have some difficulty servicing their market. That said, who has become your Go-To hard money lender?

Miranda Holland · Answer

As a private money broker, it depends on the borrower and the deal. Regardless of the market volatility, I still have to match the borrower with a lender that fits.

Account Closed · Answer

no, no i really appreciate the additional insight! we've had a rather plug and play system but we've recently taken on bigger rehabs and I think this is very important to be cognizant of these longer rehab periods. thanks kevin!

Kevin Woodard · Answer

I probably sound like a broken record. But as a lender I always suggest clients have a handful of lenders in their arsenal to best fit the deal they are working on. There are a lot of variables that come into play that one may be better than another.

For a light rehab you may want 100% financing for a 6 month term, but that may be a risky move if you’re doing a heavy rehab on a unique property. For the latter example you may be better off with more money in the deal and a longer term loan.

So understand how each lender underwrites the deal and how they’re structure their terms, to have the best person for your particular situation.

Stephanie P. · Answer

This is the post of the day (I know it's early but...)

Every borrower's situation is different and it's vitally important that they are matched with the right lender.  That's why it's crucial to ask questions in the beginning.  I treat it like it's an interview to find the borrower's exit strategy, cash position, experience with both building and managing properties and other things.

Rob Beeman · Answer

Account Closed  I have always taken the approach of matching my personality with the 3rd parties that I work with (lenders, contractors, settlement agents, insurance agents, wholesalers, realtors, etc.). If I can't jive (get a long with) the resource then the fees and terms seem to me to be secondary. Since as investors we are self employed, we should have the luxury of enjoying what we do and who we do it with. Life is too short to introduce unnecessary stress.

In stormy markets (like this one is starting to be), some lenders change their guidelines, perhaps pause, or terminate some products, or worse - close up shop all together. So, one necessary characteristic in the go-to-lender is that I must be able to live with their changes and products being offered, and feel comfortable that they are NOT going to disappear before I am able to utilize the rehab funds in escrow with them (actually had that happen to me in the last stormy market).  Hope that helps.  FYI - I will send you a DM on how I might be able to help with 100% rehab financing to 70% ARV.

Account Closed · Answer

I completely agree! Starting off, we'd somewhat limited ourselves by only interviewing a few lenders but we're currently interviewing many more to supplement in areas that previous lenders lacked. I'll definitely keep this in mind as we move forward!

Dominic Pizzi · Answer

Hey Kegan!

Send me a PM, I can give you information on what I do and answer any questions you may have!

Erik Estrada · Answer

Also you are better off working with a broker that can give you favorable terms. If the relationship between the hard money lender and broker are strong, fees might be less than if you shopped them on your own.

Erik Estrada · Answer

It really depends on the hard money lender's closing rate. Be aware of the salesy inexperienced hard money loan officers that just want to get a deal in.

Be realistic as well. If you wan't a quick close, don't expect cheap money. If you wan't longer terms to hold the cash, some will have prepays.

Stephanie P. · Answer

You're probably trying to be funny, but a lot more goes into it.  Cheap and quick don't equate to the most cash out or the highest ltv or the fastest draws or borderline rural or if the property is zoned correctly or the lender who's swamped because they're the cheapest guy in town and the list goes on and on.

The best loan for the borrower isn't always the cheapest or the fastest.  Sometimes it's neither.

Cheap things are seldom good and good things are seldom cheap.  That old saying goes for most things.

Who has been your Go-To Hard Money Lender?

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