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03-11-2011, 06:39 PM #1Junior Member
- Join Date
- Jun 2010
Hard money Loans (HELP, newbie getting into real estate)
Brief introduction about me. I've been an engineer for 3 years now (Age 26) and have been browsing all kinds of car forums for a while and somehow landed at this one. The crowd here is on another different level for sure but this forum seems more experienced. I'm now looking to invest into real estate.
I have found a bank-owned property that is too good too pass up but it needs lot of work such as basement irrigation and leveling. I have great credit and have been pre-approved before but the conventional banks will not approve a mortgage for properties like this. I have done basic research on hard money lenders. Thought I'd ask here for an education on them.
I've called a few places to shop around. Just don't know the specific questions to ask. Most of these places offer different terms such as 2, 5, 15 year terms. Some don't have pre-pay option. Interest rates are like 12-15%. Any help and experience related coments will be appreciated.
Last edited by PhillyM3; 03-11-2011 at 06:43 PM.
03-30-2011, 05:13 AM #2Member
- Join Date
- Oct 2010
- Scottsdale, AZ
typically hard money loans for those who have income/credit issues, but have equity. most hard money loans the max LTV will be around 55-60% tops with a balloon loan.
typically hard money lenders are looking for large buildings rather than residental real estate. Also it will be private financing not secured like a MBS fannie/freddie loan etc.
if you plan on occuping the home take a look at a 203(k) rehab loan if needs some work. guidelines are similar to an FHA loan for residental
personally Id never reccomend someone "start out" with hard money loans as its a loan most typically only take out when they need money asap. Hard money deals can close fast as basically an appraisal is mainly whats needed
Last edited by desert_rat; 03-30-2011 at 05:17 AM.
03-30-2011, 05:42 AM #3
^I don't agree.
Hard money loans are for someone like you who need quick funding and can justify the deal/exit clearly. If indeed the deal is as good as you think, then 12-15% IR for 6-12 months can work - go pick up a copy of Scotsman Guide and call from the "HARD MONEY MATRIX" and ask each lender their requirements. This isn't a sophisticated method of sourcing money but in your case, it sounds like a great place to start.