All Forum Posts by: 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 anyone 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

@David Crews sending you a message

Agree with @James Rodgers. Jeff Parmer

@Paul Welden @Daniel Toshev Yeah, I'm talking about a hard money loan. Now, if you're struggling to find a lender who will lend 203k, I can direct you. But if it is as Daniel said then, yeah, I was strictly discussing hard money!

Would love to learn some names/companies who have done good work for you?

Thanks

Hey everyone...hope you all are doing well and in good health! I get asked about this a lot so figured I'd share. Every HML will work somewhat differently but I will let you know the standard flow:

1) Get pre-approved with an HML - This should be free. DO NOT PAY AN APPLICATION FEE. This is a sign of a possible scam.

2) Look for a property and get it under contract.

3) Send the executed contract to your HML. They will let you know what other little paperwork may be needed and probably order an appraisal. I am always skeptical of the HMLs that don't require an appraisal. An appraisal is the only thing you should ever pay for before you close the loan.

4) After the appraisal comes back you will get a document that outlines the amount to be borrowed and all fees that will be relating to the loan (I would suggest to ask for an example of this document when you are searching for an HML so you will know what fees are going to show up).

5) Close the loan with title company, typically chosen by the seller

6) Begin work and make draws on any repair balance. Most HMLs will pay for work completed. To have the funds released you need to have a third-party inspect the house (typically handled by the HML) and the repairs made. Then they will release the funds based on what is finished.

7) Sell the home and payoff the loan / rent the home out and refinance the borrowed amount.

Hope this helps give a simple time-line. If you are looking to do a refi at the end of the hard money loan, I would suggest lining up that refi company at the same time you are looking for hard money. Your HML may have a company they work with frequently that will make it a smooth transition so ask.

Get asked about this a lot so figured I'd share. Every HML will work somewhat differently but I will let you know the standard flow:

1) Get pre-approved with an HML - This should be free. DO NOT PAY AN APPLICATION FEE. This is a sign of a possible scam.

2) Look for a property and get it under contract.

3) Send the executed contract to your HML. They will let you know what other little paperwork may be needed and probably order an appraisal. I am always skeptical of the HMLs that don't require an appraisal. An appraisal is the only thing you should ever pay for before you close the loan.

4) After the appraisal comes back you will get a document that outlines the amount to be borrowed and all fees that will be relating to the loan (I would suggest to ask for an example of this document when you are searching for an HML so you will know what fees are going to show up).

5) Close the loan with title company, typically chosen by the seller

6) Begin work and make draws on any repair balance. Most HMLs will pay for work completed. To have the funds released you need to have a third-party inspect the house (typically handled by the HML) and the repairs made. Then they will release the funds based on what is finished.

7) Sell the home and payoff the loan / rent the home out and refinance the borrowed amount.

Hope this helps give a simple time-line. If you are looking to do a refi at the end of the hard money loan, I would suggest lining up that refi company at the same time you are looking for hard money. Your HML may have a company they work with frequently that will make it a smooth transition so ask.

Get asked about this a lot so figured I'd share. Every HML will work somewhat differently but I will let you know the standard flow:

1) Get pre-approved with an HML - This should be free. DO NOT PAY AN APPLICATION FEE. This is a sign of a possible scam.

2) Look for a property and get it under contract.

3) Send the executed contract to your HML. They will let you know what other little paperwork may be needed and probably order an appraisal. I am always skeptical of the HMLs that don't require an appraisal. An appraisal is the only thing you should ever pay for before you close the loan.

4) After the appraisal comes back you will get a document that outlines the amount to be borrowed and all fees that will be relating to the loan (I would suggest to ask for an example of this document when you are searching for an HML so you will know what fees are going to show up).

5) Close the loan with title company, typically chosen by the seller

6) Begin work and make draws on any repair balance. Most HMLs will pay for work completed. To have the funds released you need to have a third-party inspect the house (typically handled by the HML) and the repairs made. Then they will release the funds based on what is finished.

7) Sell the home and payoff the loan / rent the home out and refinance the borrowed amount.

Hope this helps give a simple time-line. If you are looking to do a refi at the end of the hard money loan, I would suggest lining up that refi company at the same time you are looking for hard money. Your HML may have a company they work with frequently that will make it a smooth transition so ask.

Get asked about this a lot so figured I'd share. Every HML will work somewhat differently but I will let you know the standard flow:

1) Get pre-approved with an HML - This should be free. DO NOT PAY AN APPLICATION FEE. This is a sign of a possible scam.

2) Look for a property and get it under contract.

3) Send the executed contract to your HML. They will let you know what other little paperwork may be needed and probably order an appraisal. I am always skeptical of the HMLs that don't require an appraisal. An appraisal is the only thing you should ever pay for before you close the loan.

4) After the appraisal comes back you will get a document that outlines the amount to be borrowed and all fees that will be relating to the loan (I would suggest to ask for an example of this document when you are searching for an HML so you will know what fees are going to show up).

5) Close the loan with title company, typically chosen by the seller

6) Begin work and make draws on any repair balance. Most HMLs will pay for work completed. To have the funds released you need to have a third-party inspect the house (typically handled by the HML) and the repairs made. Then they will release the funds based on what is finished.

7) Sell the home and payoff the loan / rent the home out and refinance the borrowed amount.

Hope this helps give a simple time-line. If you are looking to do a refi at the end of the hard money loan, I would suggest lining up that refi company at the same time you are looking for hard money. Your HML may have a company they work with frequently that will make it a smooth transition so ask.

Thanks for sharing, @Shawn Costley. Exciting news!