I recently lost a deal due to lack of funding. The house wasn’t on the market yet but the owner had already moved out. While trying to find her, two days later, the property hit the MLS for a price of $21K. I couldn’t find a lender who’d do the loan. I don’t want this to happen again so I need to line up a hard money lender (hml) but what questions do I need to ask?
Also, is it unusual to need $5k before most hmls will fund a deal?
I’m in Missouri
Thanks,
StLInvestor
There are several “Hard Money Lenders” to choose from and yes, some are better than others. Check out our website for lists of hard money lenders in your area.
The other thing to consider is our transactional funding. This will be a way better option than hard money if you are planning to simply flip the home.
Here are some things you can expect or ask when you talk to a hard money lender.
Do you require a credit check >
Do you require tax returns >
Do you require bank statements >
Do you require pay stubs >
Do you require a down payment >
How fast will funds be available >
What is the maximum length of the loan >
What is the interest rate per year > (10% – 20%)
Is there a pre-payment penalty >
What are my closing costs > (points 2-10)
How much will you loan > (65% LTV)
What is the min. or max. you will loan at one time >
Make sure they lend in your state.
With this information, now you can call some HML’s and pick the ones that best fit your criteria. It is important to establish a relationship soon, because there may be some hoops you need to jump through before they lend to you.