I just finished putting together my first draft of a list of questions to ask hard money lenders for the wholesaling groups I’m putting together and wondered what the best questions people have that they always ask when interviewing a new potential hard money lender for their deals are.
For example, here are a few of mine:
What is the process with you for getting a loan on property that I am buying?
Do I get approved with you in advance?
What is the maximum Loan To Value that you lend on properties?
Do you loan on single family homes only?
Do you loan on duplexes? Triplexes? Four-plexes? Apartments? How large?
Do you have a maximum loan size? Minimum loan size?
How many loans with you can I be doing simultaneously?
What type of documentation will I need to process the loan?
What borrower criteria do you look at for the loan?
Can my LLC, Corporation or Trust be the borrower?
Do you require to be in first position with your loan? Would you consider a second position if the Loan To Value was still low enough?
What property criteria do you look at for the loan?
Thanks in advance!
Sincerely,
James
P.S. I am giving these to the wholesale teams so they have some standard questions to ask when they are talking to new potential HML.
1…What is the process with you for getting a loan on property that I am buying?
2…Do I get approved with you in advance?
3…What is the maximum Loan To Value that you lend on properties?
4…Do you loan on single family homes only?
5…Do you loan on duplexes? Triplexes? Four-plexes? Apartments? How large?
6…Do you have a maximum loan size? Minimum loan size?
7…How many loans with you can I be doing simultaneously?
8…What type of documentation will I need to process the loan?
9…What borrower criteria do you look at for the loan?
10…Can my LLC, Corporation or Trust be the borrower?
11…Do you require to be in first position with your loan? Would you consider a second position if the Loan To Value was still low enough?
12…What property criteria do you look at for the loan?
I will answer these for you as a lender…But I’m not soliciting business,rather I am trying to make you see what other lenders will say…
- How much of your own money are putting into the deal…I require up %40 MONEY of the borrower into the deal…Not ARV,Not appraisal based…MY OPINION…
2.Yes…
3.About %55 LTV…And that is a value that has been determined by me…
4.Yes but NOO only…Non Owner Occupied
5.Yes…to all…How big?..How much skin do you have in the particular deal…
6.As many loans as you have your own capital to partner up on deals with…Hard Money lending is collateral/asset/equity based lending…
7.Documentation?..Collateral,free and clear properties,money…Thats the most important…Skin in the game is what your HML wants to see most…
8.See rule #7 …
9.Yes but there will have to signed personal guarantees from someone who will be on the hook…
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%99.9 of all HML’s I know only do first position nowadays…Years ago is different…We live in the here and now…
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Free and clear…Equity…Unless you can cross collateralize a different free and clear property…
12.No war zones,No burn outs,No trailer parks,No manufactured homes,No raw land,No Mobile home parks,No wetlands,No ex-gas stations/gas stations…
Thanks. Yes, I ran a wholesaling business that was active in 280 markets. I was looking for anyone that had any additional questions that might want to add.