Looking for advice on finding a hard money lender

[Christopher Lane]

I’m looking into purchasing my first property in Pennsylvania. I would like to try hard money but I’m not sure where to start. Anyone have any tips?

[Caleb Jordan]

Originally posted by @Christopher Lane:

@Taylor L. Thank you, are there certain things I should avoid? I have never used Hard money before and I am pretty curious about it.

One of the things alot of new investors fail to understand is that often when you shop hard money you are often looking at apples and oranges not apples to apples. 

Alot of people just shop the rate and it is the totalizing factor. Cost is important. But think about other factors and how those fit into your strategy. Often those other difference are actually just as important as cost.

So for example you might find a 6 month loan at one lender with no appraisal. Another offers 12 month loans but needs 3rd party appraisal. Those are two totally different loans products.That difference may not matter to you or it might be super important. A bad appraisal might loose you a deal, or an 4 month project turning into an 8 month project costs thousands in loan extensions in that shorter loan.

You might find a super low rate at lener A but it takes them 2 or 3 weeks to close and they source and season funds. lender B might charge significantly more but can close in 4 days and does not source and season funds. Those are two totally different underwriting procedures.

It is important to know and recognize needs and those significant differences, not just look at rates points.