HARD MONEY CAN BE EASY MONEY FOR YOUR REAL ESTATE DEALS TAMERA ARAGON
Is there a pre-payment penalty?
How do I go about doing a hard money loan?
Some come with no prepayment penalties while
There are basically four steps.
others have a minimum interest clause. With a 3
month minimum interest clause, for instance, it
•
Find and interview potential resources. You will
means that if a borrower repays a loan in 3 months
need to ask for referrals from others in the
or more, there is no penalty. If the borrower repays
business, do an online search OR Advertise for it.
the loan, for example in 2 months, then the
Feel free to contact me here if you are looking for
borrower will have to pay an extra month’s interest
a hard money lender. I am happy to share a
out of escrow at closing.
referral if I have one. My Coaching and Training
offers resources and scripts for hard money
How fast can hard money loans close?
You should figure on at least 2 weeks. (Keep in
lenders in many states.
•
When you find a deal is accepted by a seller
mind that it is only possible for the lender to move
(signed purchase agreement) , run your deal by a
quickly if the borrower, broker and other third
couple of those hard money lenders you had
parties are moving quickly as well.)
talked to, to get written quotes and terms.
Is an appraisal required?
•
Be prepared to email a loan packet. This might
include comps, photos, copy of contract for
property.
Most hard money lenders require them. Some
individual lenders may go off of comps.
•
If the property checks out to have equity required
by lender, the loan is closed through escrow.
What needs to be included in a hard money
loan package?
A private money loan packet is generally fairly
straightforward and varies by lender.
Principles of Hard Money Lending
1.
HMLs are property based; they do not look to
the creditworthiness of the borrower. The
security for the loan is the property not the