HOW to Tell WHO You Are Referring Your Hard Money Loan To

Hard Money Lenders – Private Investor loans- Wholesale/Direct lender/Broker ??? I often have brokers ask me “are you a wholesale lender or a broker”?

This due to wanting to avoid a broker to broker chain, or not knowing if you are talking to a knowledgeable underwriter for the investor or just another broker who wants to shop your loan around town. He may have good connections with hard money lenders and could co-broker with you ,if you don’t know where to go. If that is not what you want,then you need to ask a few questions. Be aware of some signs that you are not with a direct hard money lender, or an actual hard money lender at all.

Before I get into that, lets define, hard money lender, private money lender. As these terms have been abused  a lot in the last few years in the hard money arena. Advertisers don’t always truly represent what they really are. (I’m sure you’ve never experienced that) Before B,C, loans were sold to wall street in the 80′s a borrower with bad credit had only one place to turn, to a hard money lender.(Now they are coming back)

Hard Money defined: To turn an asset into hard cash( nickels and dimes). Private investors would look for a property that had  good equity position for his collateral.
Loan to Value range, 60-65%. They go an look at the property.
Investors would look to see if the borrower could make the payments or had a
plan to use reserves from the loan to buy time to sell. If it is a commercial building,
he would look to the actual or projected income to see if that would  debt service the loan.

Some signs you are not with a hard money, private investor source:

• National Lender: No one has investors in every state.
• Package required: Tax returns, Financial Statements, MAI appraisals, not a private investor requirement.
• Approval: It only takes days for a decision to be made.
• Loan Amounts: up to 100M, no single investor is going to write that check.
• There is alot more but I hope those help cut down your shopping time.

This entry was posted on Thursday, September 11th, 2008 at 1:33 pm in Loan Brokers. Bookmark this page, or follow responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.