What do Hard money and private lenders need to see

Question

Hi,

What seems to not be mentioned often is exactly what hard money lenders want when presenting the deal to them and what that turn around time is.

Context- Where im looking properties that are good deals move fast. So I want to be able to make offers fast to secure the best deals. previously ive had 20% down for each deal and already pre approved. I dont want to offer and put down ernest money and themn have a lender say no go. Any advice on what they expect/need is appreciated Im new on this side of things.

Kyle Spearin · Answer

@Michael Nelson I've seen lenders willing to let you borrow 100% once a relationship is established. Usually it's somewhere between 10-20% you need to bring to the table, plus points/fees. You'll also want to bring them good deals. Tell them your purchase price, work that needs to be done, and ARV as you're vetting them.Documents Needed for a Hard Money Loan might include:

LLC Documents

Your Credit Report

Company Bank Information

Your ID

Signed Purchase Contract

Rehab Budget

Track Record of Success

Every hard money lender has different requirements, so some of these may vary. In general, you need to show that you are a reliable borrower with proof that you’ve had success in real estate before.

Matthew Crivelli · Answer

@Michael Nelson

Purchase (less your down payment) & rehab costs that don't exceed 70% of your ARV. If you want to play that safe make it 65% of your ARV. You need decent credit and some skin in the game. (15%-20% down + pay for closing costs)

Typically when investors call me i will go over the numbers with them right on the phone and verify the deal fits our box / give pricing, then I'll take the time to do some comparable sale research to verify if your estimated ARV is within reason.

Rehab loans are never going to be a sure bet because there is typically the need for an independent 3rd valuation, AKA an appraisal. Sometimes an appraiser is going to disagree with your projections and throw the deal for a loop. It's unfortunate when it happens. You will be hard pressed finding a lender who tells you they have never had a deal fall apart due to a low valuation.(unless they are lying)

John Otradovec · Answer

I am 20yr lender and HML as well as Investor.  If the deal makes sense, we can get it done in as little as 7-10 days.  With experience you can put as little as 10% down and sometimes less.

Carrie Matuga · Answer

Hi Michael, If you are looking at a bridge for a fix and flip (either to BRRRR or to flip), typically HML will want to see purchase price, your track record, your credit score, your reserves, your SOW and an idea of your exit plan and ARV. If you are looking at more DSCR type options for a stabilized property, then you can layer in market or actual rent, taxes and insurance estimates to calculate DSCR rate. Happy to talk more.

Eric Goldman · Answer

you should find someone who you can shot the deal over to, they say yes or no then you toss the EMD down....

if a purchase and rehab

how many deals have you done, address, purchase price, est rehab cost and est arv, credit score and llc name.

for a 30 year fixed long term purchase or refi

credit score, address, purchase price or est value, rent or expected rent if purchase, taxes and insurance.

these are deal by deal.

River Sava · Answer

Hi Michael -

It dpeends on what specifically you are looking to do. Is it a purchase/rehab for a flip or BRRR or are you looking into turnket properties that would align with the DSCR product?

Happy to connect/answer further questions.

Jay Thomas · Answer

You're right, speed is key in a competitive market, and understanding what hard money lenders want can give you an edge. The property itself is the primary security for a hard money loan. Lenders want properties with good after-repair value (ARV) – the value after renovations are complete. They'll typically lend up to 60-70% of the ARV, minus the estimated renovation costs. So, bring strong evidence supporting the property's potential value.They prefer experienced borrowers or teams. Having a clear renovation plan, budget, and exit strategy is crucial, along with being ready for a quick closing. When assembling your hard money loan package, include an executive summary, property appraisal, renovation budget, proof of funds, and borrower qualifications. While turnaround times vary, a well-prepared package can lead to a decision within days, sometimes even within 24 hours, from reputable lenders.

Ryan Davies · Answer

Most are like this:

• •	Rates: 9% to 13% (Most Deals are 11-12%)
• Terms: up to 36 Months (Most Deals are 6-12 months)
• Fees: 2-4 points(%) of loan amount paid at closing (Most Deals are 3 points(%))
• Minimum Loan Amount: $50,000 (For loans less than $250,000 $2,500 minimum fee)
• Max Loan: 65%-70% of After Repair Value(ARV)
• 100% Rehab Financing Available (Require 20% of purchase price down payment or cross-collateral)
• Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 2 Weeks)
• NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

Jake Baker · Answer

@Michael Nelson

1. Copy of Purchase Contract 2. Title Company Contact Info3. Itemized construction budget4. Borrower Information5. Corporate Docs (if an LLC)6. Evidence of cash available Signed Term Sheet (attached)7. Updated borrower track record

Michael Nelson · Answer

Thanks for sending the request over and for the info. I always like working with folks who also invest. Building a list of HML right now and getting my teams lined up. Ive saved your contact and will reach out soon.

What do Hard money and private lenders need to see

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