Success with Hard Money Lenders

[Barry Ingram]

First I want to start by giving credit to @Steve Hall from Jacksonville....his reply in the Houston thread sparked this desire to start this discussion and I incorporated from that post. 

If you want to be successful and have a better chance of getting a response and hence getting the funds you need from a hard money lender. 

I want to suggest some details you should consider having when you make your request.

Must Haves

1. Property Type
2. Purchase Price
3. ARV
4. Cost of Repairs
5. How much cash you have on hand to use in the deal
6. Your credit score
7. How many flips you have done within the last year
8. City and State of property
9. Do you have a contract? If not, give details on why you expect to get the contract

Should Haves

1. Did you physically see the property
2. Do you have partners
3. How was the ARV determined
4. Do you have an appraisal or BPO
5. If it's a rental unit, does it have renters, how close do you live, will you be managing it
6. What is your exit strategy? Fix and Flip...Fix and Hold....BRRRR...etc
7. How were the costs of the repairs determined
8. Do you have the funds to start the project and make it to through the first draw (if the loan is setup that way)

Things that make the lender feel better

1. What is your net worth
2. Will you be the general contractor or will you hire one
3. If your credit score is low, do you have bankruptcies
4. What is the expected time frame to finish the renovations

Remember in hard money lending we feel is a win-win-win, so we want to do the deal to help you get started on your project and help our lenders make money. We want to offer our lenders deals that show that risk is mitigated as much as possible. 

Be sure that you know what fees you are haggling over. If you are going back and forth about high points between two lenders and miss the extra "fees" that might be charged by one, you are missing the point. Know exactly how much you need to close and how much you will spend for the money by the time you expect to exit....compare apples to apples. 

[Daniel Molina]

Originally posted by @Austin Ojimgba:

@Barry Ingram, Good post. Let me help give a little advise for those seeking Hard Money Loans,stop shopping your deal around cause it kills your credibility within the Lender community .

I disagree with this. The feedback should be don't shop brokers. Lenders are accustomed to seeing deals all the time and they are happy to work with end users. Brokers end up shopping deals for clients and while a client might continue to shop themselves you start getting multiple LOs involved.