Hard Money Bankers - Why Min ARV Matters

Have you ever wondered why a lender won't do loans that are 'too small'. There is actually a logical answer to it. It can be for two reasons. One reason is that the lender doesn't want to deploy a full set of loan docs for an amount return on loan that is almost not worth the energy. The other answer is because of the exit strategy. There is a cut off point in every market where the shift on the price point of the property goes from an owner occupied area to a non owner occupied area. Each market is different, but a lender on short term loans will always want a clean fast exit in case they had to deal with a property. In order to do this, they will want to be in a location where there is a lot of owner occupied homes and they are not reselling a property to another investor that is going to pay for cash flow. Taking a property is very rare but in the event that it does in fact occur, the lender always wants the fastest way to recoup the money and have the property off the books.

[email protected]

215.839.3271