Who funds a hard money loan?

Why should I choose a hard money loan over a conventional loan?

Different guidelines:

Conventional loan - you have to get a certain kind of appraisal. You have to provide your tax returns, and your two months of pay stubs, bank statements and the list goes on

Hard money is more of a make sense loan

When you build a relationship with a hard money lender or fund, once they have a history of working with you, you get the money like the next day

Is for people who need to act fast and it’s just not going to work with banks

Is created for investors, it’s just a matter of finding the right hard money lenders that will work with you, that have pretty fair pricing and attractive rates and terms

Hard money loans, are they usually on the shorter term verses, say, a thirty year conventional loan?

Yes, exactly, so my fund does a lot of construction loans, and renovation loans—rehab loans

Our loans are typically six to twelve month terms

Our fix and flip loans are six months whereas some of our spec construction loans are about twelve months

We have high net worth individuals and they actually put money into a fund, and we have managing members that make the decisions of that capital.

Advantage of dealing with a fund:

It is better because the money is there, it’s sitting in a bank account ready to fund

Whereas individual hard money lenders or private money lenders—what they do is they do trust deed investments

You send them your loan scenario and they go find an investor to put a trust deed on the property, which can take much more time