Just some thoughts on finding the right Hard Money Lender

[Jared Sandler]

Hey, everyone...I know some people are nervous working with hard money lenders and I get it. It isn't something people are as familiar with and that leads to hesitation ESPECIALLY when it's your money. What you need to know is 1) Hard Money isn't for everyone but 2) It is very effective for those who use it right and find the right lender.

You want a lender who acts as a teammate as much as a lender. That means they're there to lend their guidance--most good HMLs have extensive market experience and have seen a ton of deals of all shapes and sizes and know successful deals and red flags when they see them--and simply be there to communicate with you. After all, you're investing lots of money and you should only be able to speak with someone from 9-5 M-F when we're talking about thousands of dollars.

There are a lot of lenders out there who don't really want to commit time to you unless they know you're going to do a deal. That's understandable. I get it. Time is money and no one wants to spend 40 minutes on the phone with someone who isn't serious in the least about actually doing a deal. But with that said, there are lots of people who genuinely want to and need to learn about the process to determine whether it is a fit and how they can take advantage of a hard money loan. Maybe it even goes so far as to you, the borrower, sending the lender a potential deal to review, even without a pre-approval or a commitment. Some might balk at that but if you can find a lender who will put in effort for you without any sort of a commitment, imagine how hard they'll work when there is $$$ on the line. Find a lender who feels more like a teammate than just some robot who is a part of the process.

One last thing...remember that lenders don't make money when you don't do deals. Obviously, right? But when they deny a deal or advise against a deal remember this because a lot of times it leads to frustration and the feeling that the lender is trying to get in the way of your success. Lenders aren't perfect. It's their job to assess risk and put the ball on the tee. Just because they deny a deal doesn't mean it is guaranteed to fail but they obviously feel like the odds are not favorable enough, whether it is the location or maybe your financial profile and its ability to assume a level of risk. No lender wants to deny a deal because they aren't getting paid to say no. With that said, you should want a lender who will say no. If you get in a bad deal, it's merely a scratch for most reputable lenders, but it is a blow to stomach for you. Your credit and your reserves will be impacted and in some cases it might not be an easy recovery. Don't just run to a lender who will only say yes. Those are the lenders who aren't looking out for you and your best interest.

Hope everyone is well and healthy