Being in real estate investment business for quiet a long time, I have heard a lot questions about how to get a hard money loan and what the basic criteria are.
These people always talk about their personal background and they basically believe that like other loans, hard money loans are also based upon the individual.
But let me clear this once and for all, that hard money loans are based upon the asset or property you are trying to get a loan for. If you have found a good property, which has all the factors going in its favor, then you will get a hard money loan. No matter what your credit or job history is.
People spend so much time in talking to different lenders and asking them about the pros and cons of getting a hard money loan. But they never care about going out and finding a good deal, which is the FIRST and BASIC step in moving towards getting a hard money loan.
I have written quite a few books on hard money lending business and I have talked about the basic rules of this business. The fundamental rule of this business is to have a good deal and if you have that then finding money is easy. But if you don't, then it is important that you spend some time in finding one, rather than wasting time talking to people.
If you think you have found a good deal but you aren't able to get financing on that, then there are chances that it isn't a good deal. You need some experienced people to tell you, whether it's a good deal or not.
A common mistake, which most of the people make is that they get emotional about a particular property. This usually happens with the first deal. They are too excited and they feel that they couldn't find a better deal than this. But when a third party or evaluators checks it, the property turns out to be pretty dubious.
So, please don't get attached to a property emotionally. Think wisely before getting a property under contract.
A lot of people find it very difficult to search a good hard money lender. The first place to look for them is Google. Just type in the keyword "hard money lenders" or "hard money loans" and you can get a list of lenders. Double check, if they are operating in the area your property is located or not.
You can choose few of them after looking at their requirements and call them up. You need to figure out, whether they are lending based upon the property or individual. You can ask them a few questions like if they require monthly payments or if they will check your credit or job history.
If they say they will need all these things, then they are not true hard money lenders because true lenders prefer to talk about the property and try to evaluate, whether it's a good deal or not.
Another important question is, if they would offer you money for the repairs or not and how much money would they give you for the property itself. Would it be 100% financing or partial financing?
The answers to these questions will tell you a lot about how they work and after talking to few of them and asking the same questions, you would be able to realize which one suit you best.