Questions to ask Hard Money Lenders

Financing, Hard Money Lenders, Private Money
1

Hi everyone,

What kind of questions do I ask various Hard Money Lenders so that I can add to my list the good ones and weed out the bad ones.

2

first and foremost…

Are you a DIRECT HML? (Meaing do you have your OWN funds to lend or do you have to find an investior to fund the deal)

3

Thanks DHLC,

I would have never thought of asking that kind of question.

4

Well, I would hope as a lender you could answer more than that question:

Here are a few that I get asked on a regular basis:

  1. What LTV do you lend up to?
  2. Will you finance 100% of the purchase price?
  3. Are there any areas that you won’t lend in?
  4. What are your terms?
  5. Do you check credit?
  6. Will you lend repair money?
  7. How much notice do you need to fund a deal?
  8. Will you lend money for closing costs?
  9. Do you prefer to work with a certain attorney or title company?
  10. Is there an appraisal fee?
  11. Would you be willing to write me a prequalification letter that I can submit with my offers?
  12. If I locate the deals and bring my buyers to you, would you be interested in financing these buyers?
5

Absolutely! But again these are the obvious one.:slight_smile: Not sure if you are asking how I would answer the following…but I will do so none-the-less.

Here are a few that I get asked on a regular basis:
  1. What LTV do you lend up to?

70% of ARV (After Repaired Value)
2) Will you finance 100% of the purchase price?
We will finance 100% of the Rehab cost and upto 100% of the purchase price so long as the total loan does not exceed 70% of ARV. Some of the points can be rolled in as well if possible.
3) Are there any areas that you won�t lend in?
Rural. We lend in TX and CO
4) What are your terms?
12 mo. No PP on Fix and Flips
5) Do you check credit?
Rarely... only on loans above $350k if we feel we need to
6) Will you lend repair money?
YES!
7) How much notice do you need to fund a deal?
Typically 2 weeks...bt we can move faster if everything works out that way
8) Will you lend money for closing costs?
We will consider rolling some of the points in, not to exceed 70% of ARV
9) Do you prefer to work with a certain attorney or title company?
yes. But only because they can get things done faster for our clients
10) Is there an appraisal fee?
on most SFR's the fee is $350.00. We require the use of one of our Approved vendors.
11) Would you be willing to write me a prequalification letter that I can submit with my offers?
Absolutely!
12) If I locate the deals and bring my buyers to you, would you be interested in financing these buyers?
Yes