Learn how to get approved for a hard money loan.
If you are trying to get a hard money loan, what does it take? Learn the answer in the article below. It talks all about hard money lenders so you will know what to expect to get approved.
Flipping houses is a very profitable kind of real estate investing. But if you can’t buy a house, you also can’t flip it, and won’t earn from it. That is why rehabbers, or those who flip houses, rely on hard money lenders. These private lenders finance a whole project for rehabbers. So to get hard money loan, there is actually only one thing you should do: Find good deals.
Let’s look at it this way. Say you’re putting up a basketball team. You want to join a league but you just don’t have the money to buy players’ uniforms and fund their salaries. What you do is you search for a financier or a manager. That person will fund you team if he believes that he will benefit from it.
If you build a good team, that means your chances of reaching the championship stage is high. If your team, bears the name of the financier, then that’s free advertisement for him until the final stage of the league. You on the other hand, come close to the trophy with every win.
The same goes for hard money loans. If the lender believes that he will earn profit by funding your project, then you’ll get the money. But exactly does a lender determine this? They will assess the property you want to fix and flip and estimate its ARV (after repair value). The ARV is the property’s worth after all the necessary repairs and renovations had been carried out.
Hard money lenders will unlikely check you creditworthiness. That means that you can get money from hard money loans even with a poor credit score. They will not make a deep background check on your finances. What is important to them is that you prove that your project is worth funding.
After all, what they will earn from the venture will depend on the project itself. The assessment of borrowers is where private lenders and traditional lenders differ the most.
Convincing hard money lenders to grant you money is also easier. Unlike banks, they usually operate individually. If the lender says “yes” to your request, then that’s it. No more 30-day processing period, no more waiting for approval of big bank personnel. This process speeds up you loan application and your opportunity to earn more money.
To learn more about hard money lenders, visit REIwired.com. The website is your best source of information on flipping houses and all forms of real estate investing. You can watch videos, read articles, and listen to the biggest names in real estate investing through the website.
About the Author
Article by Samantha Dawson
For more Tips on Real Estate Investing go to: REIWired.com/about
Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author’s information and copyright must be included.
Samantha Dawson
GoArticles.com © 2012, All Rights Reserved.