How to Qualify for a Hard Money Loan.

So, how do you qualify for a hard money loan?Truth be told, you don't. The property is or should be 99% of the underwriting criteria. Investors lend on property that has plenty of a protective equity left after funding the loan.

Asking for 100% financing is something to ask your uncle. Investors look a profit and risk, the same as a buyer does.You offer 12% 2 pts so you can buy and flip a property in say 60 days and make 25% 30%..profit.That leaves the lending investor a whopping 2%, and he put up all the money and takes all the risk. That is why that concept doesn't work. Also future value after rehab would be taking the risk that the work may not be done. So As-is value is looked at much closer. 

Investors like to be 55-60% of value. If you can't come in with all the cash balance needed there are other ways.

If you own another  property with equity that could  be borrowed in conjuntion with purchase, a blanket loan, also a seller carry back. However, the investor has to feel comfortable you have enough "skin in the game" so if the going gets tough you don't walk away and leave him the problems.

Colleen Bigler

Loan Solution Inc.

661-251-9075