The 3 Secrets You Will Never Know About Hard Money Lenders

Posted by Chris Goulart on January 25th, 2021

One of the best ways of finding finance capital is through hard money lenders in California. Most investors who are new to the industry overlook this platform based on the myth that they would not be approved, or the fees and rates are too high. Instead of talking to the lender & finding out how they work, they simply overlook them. With the appropriate hard money relationship nothing can accelerate your business growth faster, particularly if flips and rehabs are your thing. Here are a few things you mayn’t know about hard money lending.

Hard money loan is the most practical alternative of bank loan:

The way investors think regarding hard money financing has changed drastically over the years. Earlier, hard money lenders were a last alternative if you were in foreclosure and wanted to save your house. You’d disburse a high interest charge and other hidden fees, but you did not care since you were able to keep your property.

However, over the years lenders for hard money have changed their approach and today they’re a practical alternative to the local banks. In place of borrowing on credit score & debt to income, they look more on the potentials of the property & the deal. A loan application that’d have no possibility getting approved by your local financial institution could be approved easily with a hard money lender. This provides you access to money that you’d otherwise have no possibility of acquiring.

Not every investor is approved:

Through hard money lending is more practical than traditional bank loan, they still have lending protocols & perimeters. They don’t just give a blank check to every new investor they come across. Every hard money lender in California has their own particular lending guideline that’s critical to them. Most just wish to see a capability to repay, but others require an exact loan to value and others will scour through tax returns.

An established relationship can get hard money financing with ease:

Hard money lenders prefer to work with investors they know & trust. If you can give them a regular business flow, you can negotiate the initial terms & fees. Above all, you may get an open line of credit. Instead of having to run each deal by them and hang around for approval you can have money at your disposal. Though this requires a reasonable amount of trust from both sides but it’s not impossible at all.