HML Rules

I looked through some of the HML posts and didn’t really find the answer that I am looking for, so here goes.

I read an article on this site about Hard Money Lending. Because of the housing market the way it is right now, many HMLenders are going belly up. In fact, my wife watched a news story about the feds cracking down even more on mortgage fraud; hundreds of people are going to jail right now.

With that being said, the article discussed how Hard money lenders are changing their ways a little bit. It used to be that hml looked at the deal. Now, they are looking at the person asking for the money. Asking for things like tax returns, credit report things, etc… starting to sound a little like conventional lending.

We learned in a real estate course that if you had trouble landing money the conventional way, HML could be your best bet; however, with these new rules, how are we supposed to get qualified!!!

We have little to no cash on hand, poor credit, etc,etc…what say you?


What you can do is try wholesaling some deals to put some money in your pocket and get some experience in REI. Another thing you can do while you are waiting is start cleaning up your credit. There are several companies that will help you with this for a very reasonable cost. The last thing I would suggest is that you start saving 10% of your paycheck until you have a decent nestegg. HMLs want to know that you have an exit strategy in place in case you can’t sell your rehab or that you will be able to refinance once you are done fixing the property. Hope this helps.

Thanks, Chris. We are in the cleaning up process. We are learning REI part time. Having been out of work for a while (school teacher), cashflow has been extremly low and our credit is shot as we have not been able to pay credit obligations. Most if not all are in collections. I have a full time job in the fall teaching. We have a temporary rough patch but we are taking steps to clean things up.

We are trying to wholesale. The emphasis is on trying. We had a couple of deals going, but we had to back out of one because investors wouldn’t take it. We learned what investors are really looking for and what not to put under contract. Thank you for your input!!!