How to Get Hard Money At an Ease

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I define hard money as non conventional or private financing with private funds.
  This means that they are easier to qualify for.


You may hear the term bridge loan being used in place of the term hard money which is okay it describes one of  the main purposes of hard money a short term loan  to quickly get from point A to point B.


To sum it up the main things to remember about hard money is quick closings, lower credit guidelines and minimum documentation.
  You should never use hard money where you need long term financing, because over the long run, the rate on a hard money loan will kill you (more on hard money rates later).
The hard part of hard money.
  Now when I say drawbacks it's not saying that hard money loans are any worst then conventional financing, but it would be unfair to talk about hard money and offer all praise and no criticism.


Well once you know the answer to that question you will know whether you can stomach a hard money loan.
  Whether you go to a lender or broker expect to pay anywhere between 2 points and as many as 10 points in fees for a hard money loan.
  You can expect a rate in the range of 9% and as high as 24% depending on the lender and the terms.
  Usually the shorter the term or the more complex the loan the higher the rate.
  In this case it is their money, their rules their rates.
  Now this is a thing most people get confused about.


If you do not qualify for the 100% loan a traditional lender will only loan you a portion of the purchase price, even if there is equity in the property they will want you to put money toward the purchase.
   In order to get the $80,000 from the bank you would need to contract for $100,000, but you will still need $20,000.
  Most hard money lenders have a ceiling of 70%-75% (of course I have heard rumors of hard money lenders going higher) of the current value of the property or of the A.
V.
  This is their protection in case of default, a property they can possibly sell quickly because of the equity.
  The trick is to buy below market value, hard money lenders like good deals.
 This brings us to the next section.
The best uses for hard money

Hard money is not for every situation, here are some ideal hard money situations.
  Conventional financing with the rate rollercoaster, paper work requirements, underwriting guide lines, etc.
 If you have a deal you need to move on quick you can use hard money and close in as little as 2 days.
  A traditional lender will want you to complete the entire process for each loan, some hard money lenders once they are familiar with you, and of course you have a good payment history, will not even need you to submit applications for future loans.
  Hard money and rehab properties (fix and flips) go hand in hand.


Most conventional lenders will only lend on properties in move in condition, and if the property does need renovation or repairs that is on you.
  So if you are investing in properties to flip or wholesale, and they need repairs or renovations before they are in move in condition then you need hard money.
And you can include renovation costs in the loan amount as long as the total costs don't exceed the limit.
 So for instance say you have a property under contract for $50,000 and it needs $20,000 in rehab, to get it into move in condition and has an ARV of $100,000.
 (And I bet you didn't think that was possible nowadays)

You have different types of property.


You have a well defined exit strategy.
Because as I said before hard money loans do not have long terms but they do have high rates.


Hard money can be easy, once you know what it is and how to use it.