What do hard money lenders want to see?

[Cayla Walker]

I have a property in mind that I want a hard money lenders help on. I have a few lenders in mind but how do I present the property to them so they more than likely will say yes.

[Jonathan Satizabal]

They look for a construction budget. Try to be descriptive as to what you are doing. Below is a construction budget from a small project I did  a few years ago. This is a common practice for construction loans so it's good to get into the habit of laying out a budget. It's just an Excel file. The budget items say complete because they used the budget for my draw schedule. The costs are low because I did a lot of the work myself.

Some common requirements that lenders have.

1. 1. Purchase the property in an LLC so I had to set that up.
2. 2. Construction Budget.
3. 3. Some lenders have minimum loan amounts. This particular lender is no longer loaning if the property purchase price is less than 100k.
4. 4. Down payment is based off of the purchase price and the construction cost, example, 50k purchase + 50k rehab at 20% down would be 20k.

Your best bet is to call different lenders and find out their requirements. I believe the Construction Budget and LLC requirements are very common so be ready for that.

Side note: you will be financing this property twice once for the rehab loan and then you will need to refinance out of it to a conventional loan. Just plan on a lot of closing cost hitting your bottom line. I try to avoid hard money but sometimes it's the only option.

Budget Item	Description	Total Scheduled Item Cost
WINDOWS complete	2 decorative front windows and 6 windows on the first floor	$ 3,000.00
DOORS Complete	1 exterior door, new locks and 5 interior door knobs	$ 500.00
BATHROOM REMODEL Complete	1 bath tub, 1 vanity sink with cabinet and mirror and new fixtures	$ 2,600.00
BATHROOM TILEWORK Complete	new tile in shower and floors	$ 1,500.00
KITCHEN REMODEL Complete	tile the floor material and labor	$ 1,500.00
KITCHEN CABINETS Complete	cabinets and counter top	$ 2,000.00
KITCHEN FIXTURES Complete	Kitchen sink, light fixtures and outlets, add outlet for dish washer	$ 700.00
APPLIANCES complete	refrigerator, oven, dishwasher and hood	$ 1,500.00
FENCE REPAIR complete	repair missing slats and damaged posts	$ 1,000.00
FLOORS complete	new linoleum tile in entry way, touch up hard wood floors with stain and polyurethane	$ 1,000.00
CONTINGENCY complete		$ 1,500.00
PAINT THROUGHOUT complete	paint entire first floor	$ 1,500.00
Total		$ 18,300.00