Private Hard Money Loans for Real Estate Investors

The real estate market currently offers investors some of the best investment opportunities of more than a decade. Thousands of investors visit our website each month and  investors need and ask for our funding help.  How do I get my deal funded?  What do private hard money lenders ask for?  Which lenders should I contact?  What type of properties are they funding?   What kind of funding is available and what terms are being offered.  What do I need to do?

Signing up for this newsletter was your first step to learn the answers to these questions.  With this knowledge you can learn how to help your partners, friends, and families prosper and you can progress riches in real estate investing.  

One thing we know for sure, real estate always has been and always will be one of the best ways to obtain and protect wealth.  History has taught us that.  Real estate gives us the chance to have great tax benefits, build equity in our properties,  and profits when we sell.  But for many investors, the challenges arise in finding suitable investor financial backing.  Learning how to obtain private hard money is key for a serious real estate investor.  

The concept of using OPM (other people’s money) has been a platform to building wealth.  It is true that most millionaires discovered that real estate offers depreciation, price appreciation, and tax benefits.

Most real estate investors use the money of private hard money lenders.   It is surprising to learn that not all of these investors had great credit.  Many, in fact, started from scratch and built their real estate portfolios one property at a time and with only one or two private lenderst.

To be successful in getting your investment properties funded by private hard money lenders here are the principles to adopt.

1. Plan on devoting at least 5 to 10 hours a week Soley to your real estate endeavors.

2. Divide that time equally in FOUR areas:  finding excellent properties, writing offers on those properties, submitting those properties to private rehab hard money lenders for funding and finally, always marketing and advertisng, and working with buyers.

Next, you need to know the lenders guidelines and avoid submitting properties that do not meet those guidelines.  The right property,  in the right location, for the right lender. If you do not have any money for incidentals like appraisals, inspections, etc., add a business associate who can  If you are planning to do rehab, some lenders will also lend you money for that by placing money in an escrow and then reimbursing you or paying your contractors outright when the work is finished and an inspection effected.  Some investors will get a credit card from companies like Lowes, or Home Depot and use that for materials and even contractor work.  Expenditures like that are reimbursable.

There’s no reason to become negative in mindset that the lender has to fund every property that you submit.  If the property is an excellent property, and one lender turns it down go to another lender but don’t “burn your bridges”.  Remember, it is a relationship game and that same lender that turned you down may be able to help you on another property down the road.  Don’t allow frustration to enter the game!

Private asset-based loan companies do actually compete for business.  They are already aware of the existence of other private hard money lenders who loan in their areas and they try to make their loans competitive.
Sometimes private investors believe that their credit score will knock them out of the ball park when it comes to getting funding from a private “hard money” lender.  This is not of necessity the case. However if you have an ” norm” or “bad” property and low credit, most private hard money lenders will ask you to form a team that will enable you to get solid properties under contract.  

So as you can see It is obvious Often times, your credit score alone is not the determining factor with private hard money lenders. A low credit score plays a  major role with formal mortgage companies, however.  The term “hard money” lender is deliberate from the fact that these lenders only loan money on “hard assets”, preferably real estate.  It could be a single family residence acquired for the purpose of
merchandising with a profit.  Or it could be a single family residence acquired for the purpose of “rehabbing the property” and creating value and then selling.  Or maybe a great income property unit.  Or it could be a great mixed-use property!

One of the most important things is to know your wealth strategy.  Are you planning to gain wealth from buying and selling, buying and rehabbing, or buying and renting or a combination of the three?  Which type of property do you want to concentrate on–residentialor commercial, single family or multi-family?

Like investors, lenders have wealthbuilding goals.  They do not lend on every single type of property in every single geographical area.  Some lenders concentrate on specific types of property and some concentrate only on specific areas.  Some will not lend on rural property.  Some hard money lenders will not lend on land.  Some will not lend on single family.  Some will not lend on commercial.  Investors have learned this and saved themselves a great deal of time and enabled themselves to survive much more profitable by creating a wealth strategy that is well-matched with the wealth strategy of their lenders.  This is fundamental to building a relationship with a lender.  Your lender will always want to know your “exit strategy”  and exactly how you plan to use the money.