Direct Hard Money Lenders California
What is Hard Money?
Hard Money is a private lending alternative for Real Estate investors. Private investors/Lenders will lend their money and will use the property as the collateral.
Usually these loans cost (percentage-wise) much more then an average mortgage, often times up to twice what a regular mortgage does, plus high origination fees.
Hard Money Lenders normally don’t make decisions based on credit, but they do based on equity and income.
Why Hard Money is beneficial to Trust deed investors?
Hard Money Lenders best source for years was Trust deed investors from all over the world. The reality is that most investors don’t have that many options out there as far as getting high ROI(Return On Investment).
Most investors have a job or a company where they make their money and from there to the bank. In some cases investors are trying to “PLAY” in the stock market and most of them loose their money in days because they don’t have enough knowledge to make the money they want to make. In Real Estate it’s different because your money is protected with the most secure and profitable investment “Real Estate”.
In Trust Deed investing your name/company name will be on the actual deed as the lender. With and ROI of 10% to 12% and Interest only payments. This Rate will be Fixed and payments will deliver to you on a monthly basis.
Who needs Hard Money Lender?
Developers, Flippers and long term investors are the blood of the Hard money business. These type of investors main concern is getting the deal and making money from it. Most Real estate investors don’t really show much income on their tax returns but they do make enough money to make the payments, so they can not qualify for a loan with a conventional lender. Hard Money will provide them the money they need to purchase/refinance their real estate within days without looking at their tax returns or credit.
Interest Rates, Terms, Loan amounts, Points & Fees:
Hard money lenders normally generating their income from points they charge during the escrow process. Income can be generated also from the interest rate being charged on the mortgage, so the hard money lender will charge 11% on the loan and the trust deed investor will get 10%- In this scenario the hard money lender makes 1% spread. Rates are normally between 8%- 12%, points start at 2.5 from the loan amount.
Borrowers Credit score & Income:
Hard Money lenders really don’t look at credit, but income can be crucial. Hard money lenders accept borrowers that had foreclosures, bankruptcy, mortgage lates, collections, etc. Income will be verified through borrowers bank statements. Since we know that most self employed professionals never really report in the tax returns most of their real income. Hard money lender need to verify that Borrowers can make the payments before they can get any money.
Type of properties & Borrowers we will consider:
Hard Money lenders normally lend money on income producing properties, commercial and residential only. Very few lenders out there will lend their money on Land.
Hard Money lending companies want to make sure that in the case that they will have to foreclose on the property it will be easy to re-sell and recoup their invested money.
Type of Borrowers we will consider are Real estate investor on NON Owner Occupied properties only. The reason we don’t lend money to owner occupied properties is “Section 32″(you will find information about section 32 below).
Locations where we lend Hard money:
We lend money in California and Nevada only. These states are close to one another and it’s easier for us to travel to look at the properties. We do inspect all properties before lending any money!
What is “Section 32 Law”?
Learn more about section 32- High Rates High fees CLICK HERE
Read More Articles about Hard Money Lending:
1. How to Navigate Today’s Commercial Real Estate Market in California of 2016
2. Where Housing Conditions in Southern California Stand in 2016
3. Do You Live in California? Why You May Want to Wait Until 2016 to Sell
4. Why Downtown Los Angeles Is the Place for Alternative Commercial Money Lenders to Focus on in 2016
5. Loans Without Income Verification