Topic: Looking for Private Lenders(Hard Money Loan) (Read 3753 times)

Hard money lenders today want to see a payment history by the borrower, a decent credit score, and an independent appraisal of the property to be lent on. The predominant factor they will look at is the appraisal value in which most will go up to 65%. Hard money lenders are great for fix & flips, rehabs, and cases in which the borrower cant wait on traditional lending or does not have the necessary income history, dscr, or credit. If you're looking for a great hard money lender in florida i recommend: http://capitalfundingfinancial.com - low rates & excellent service

You joined this forum to revive a thread from 2014?  WTF?

As long as I'm here, I'll say this:  hard money lending opportunities are legit if you have a qualified team assisting you (title insurance, attorney, etc) and you know what you are doing.

Lets get one thing clear, the Hard Money Niche is very small and limited. Hard money loans are for active real estate investors whom have credit or income problems and need large sums of instant cash in order to not miss out on any real estate investing opportunities. In other words, hard money loans are only for established real estate investors.

If you do not like the terms or conditions do not invest I have answered all your questions. I feel as you are just trolling now, or uneducated one or the other and as stated by the gentleman above I doubt you have the funds to loan in the first place.

I will be on skype today SN: cryptoREI if you would like to talk Real Estate, Real Estate wholesaling, Fix and Flips, Alt Funding and such

Dude you have no idea what your talking Ignore this guy, if it was true no one in the world would ever get loans to fix and flip houses, there is a whole huge industry in it.


Like I said ignore the guy above he is cluess, I doubt he even has the money to loan in the first place he is just trolling. Tends to happen around here.

If I had the money to loan you I would, I know its secured in fact more secure then most loans on this forum backed by altcoins.

The flux in digital currency is way more risky the a investment in a property, property tends not to dip 20% in a day it takes years for that to happen.

Best of luck to you, I suggest you do not feed the troll above.

Any appraised value of a property is subjective and when trying to find the value of a property that does not need repairs/improvements there is not necessarily someone who is willing and able to pay that price, this fact is exaggerated when dealing with properties needing repairs.
My point is that there is no benefit to lending this money but only receiving 50% of the benefit. All you are offing is "sweat equity" and sweat equity is not real. You are forcing the lending to take on all the risk but only half the reward.
Again this is just sweat equity. You are not adding any real value to the lender.
The point is that these loans carry a lot of risks, there is an extremely high chance the project will fail. If the project is not going to be very profitable then there is nothing that would stop the borrower from walking away from a property that is in the middle of repairs.....this arrangement actually encourages it

I would say about 25%  of real estate deals in the US are funded by private money. Some guy was doing this around me he was making a freaking killing, was buy houses for 5k -50 fixing them and selling them for a 25-45% profit. He had those stupid signs stuck to every corner in the neighborhoods he targeted, said he spent something like 2k on signs alone a year.

I asked him where he got all the money, he told me he went to local real estate investment club meetings, then would find the new members with money wanting to learn how to do it them self, take them under his wing teach them and use there money while making a profit.

People who don't understand it think its witchcraft or something lol

Start reading here http://www.biggerpockets.com/ come back after you have read this part

http://www.biggerpockets.com/real-estate-investing

Then visit
http://www.hamiltonridge.com/
http://www.thenorrisgroup.com/
http://www.dohardmoney.com/
http://www.pinefinancialgroup.com/
http://maggiocapital.com/
http://shermanbridge.com/biggerpockets/
http://wdbfunding.com/

1) Lender never lend more then 70% of the ARV of the property. So if something does fail they can at least get the money back.
2) If a lender wants to find discounted properties.... then they would not be a lender. They would be a fix and flipper lol. Its called passive real estate investing.
https://www.realtymogul.com/blog/5-reasons-for-passive-real-estate-investing
3) Non of these houses are "for sale" the are not listed. These are houses that would never qualify for a traditional loan. It takes 60+ hours a week to find these properties. 1/20 is not even worth the time. But I visit them all


Key word bolded this does not fit in that category.... its a REI loan.

If the property is not able to sell for the amount of the loan then the lender will lose. The kind of real estate you are talking about is speculative and is not guaranteed to increase in value. You have collateral but the collateral may not sell for the amount of the loan, traditionally speaking when this happens the lender would go after the borrower personally, with a LLC arrangement this is not possible.
Your time and expertise is not worth this much. The lender could hire his own contractors to preform the repairs himself for less cost/risk.
Why would anyone ever do that? If someone wanted to handle the repairs themselves they would buy the property from whoever is selling them directly. Do you somehow think that you making a post on the internet somehow entitiles you to $10k if they end up buying a distressed property because of it?
See my first comment.

I am guessing you have 0 experience in Real Estate investing correct?

Its not a LLC Idea it is a method it is very common so strike that through. The LLC is the escrow for the property understand that? Borrower defaults the lender has the property. Its like a legal multisig is the best way I can explain it.

Why would the lender go after the borrower if you have  collateral worth more then the loan in your possession?

Why should I pay more then 50% when I am physically out there fixing and finding the property? Getting them ready for market and selling them?
If you want to come swing a hammer and work I will be will to give you more of the cut. I can wholesale you the property for +10K on top of the prices listed if interested and you can do it all the work yourself if you think you are up to it .

Break down of math for you

Total Loan 73,000
Total Collateral 109,000

Its like someone giving you 149.32% collateral on your loan.

Should have mentioned
Not all monies are paid at once I should tell you, they are paid in phases after the property is purchased.
Phase 1 gets X% of rehab funds
Phase 2 Gets X% of rehab funds
Phase 3 Gets X% of rehab funds

The next phase is only paid when the lender is satisfied that the last phases work is complete.

Your LLC idea increases the risk to the lender. It would prevent the lender from going after the borrower personally, and this ability gives the borrower an incentive to repaying even if the project fails.

Also it appears that the lender is taking on the vast majority (90%+) of the risk but only sharing in 50% of the profit this does not seem fair to me

If anyone is wants to do a 50/50 split on LLC this is the property I am working on getting funded right now






3
BATHS   1
1/2 BATHS   1
FLOORS   1
SQ. FOOTAGE   1,282 sq. ft.
YEAR BUILT   1972
ACRES   0.26

63,000 Cost to purchase
15,000 Estimated repairs
---------------------------------Total Investment
78,000

Estimated profit 25k/2  12.5k Profit in you pocket for the loan.

Gain or Loss:   $12,500.00
Percentage Gain or Loss:  16.0%  <----- Find something else that yeilds like that
Annualized Return: 82.6%
Total Years: 0.246
This one needs a BOAT LOAD OF WORK



43,000
30,000
-------------Total investment
73,000

Comps put it in the area of 109,000

estimated profit 36k /2 you pocket 18k


Gain or Loss:  $18,000.00
Percentage Gain or Loss: 24.7%
Annualized Return: 144.7%
Total Years: 144.7%

banks do not lend on fix and flips...

Look at it like this on 100k loan for 30 years yields the bank $69,800.55 at a rate of 3.9%.
To a banker it does not make sense to loan out small amounts for small periods of time the yield is not good enough for them.  

But people in the private money world make 12%-18% per year on money.

100k loan at 12% for 1 year total interest $6,618.55, the man power hours and paper work is not worth it to banks.

Wow I kinda laid to rest bitcoin interest in such deals,

Not a scam at all, your money is protected. I will explain, if you have questions please ask I love to talk real estate .

That is correct the lender will get the money back + interest. If that is how the deal is structured.
The second choice is whats called equity partners, this is when the lender and the flipper splits the profit 50/50 this is usually how it works for the first time. It is a way you prove to your money you can do the deal and make them money.
Now in response to the foreclosure, the simplest and easiest way to make a 0 cost foreclosure is to purchase the property under a LLC. The private money lender holds 51% of LLC so if the borrower defaults he can sell the property at any time. This cost 0 dollars and can be done in a matter of days.

BTW on the property listed above the person who purchased it made 26k off it after all costs.

If you have the 1st lien on a property then you can foreclose on the property in the event that the terms of the lien are breached (most commonly that the loan is delinquent). It is however very expensive to foreclose on a house (generally it will cost ~$15,000) and is almost always a very time consuming process. Not only this but it is very difficult to document that a bitcoin loan was actually funded which could be a potential defense the OP could raise when a lender tries to foreclose on him

looks like a scam  
go to a bank, if it's true you'll get a loan

So the lender will only get his/her money back when you sell the house?

Well, thanks for this discussion about money lenders. Bad Credit Home Loans, Private Mortgage loans, Hard Equity Money loans are various types of loans for benefiting the borrowers when in need. This types of loans are provided by either private money lenders or banks.   

_____________________
Benworthcapital.com

Banks do not do fix and flip loans for a couple of reasons. But the main one is,
General banker logic:

Why loan 56k @ 5% for 1 year when I could loan 56K at 5% for 30 years and make a killing on interest.


30 year
$300.62
Monthly Principal & Interest
$108,223.24
Total of 360 Payments
$52,223.24    <-- Almost doubling their money and if the default chances are they get free equity
Total Interest Paid
Feb, 2044
Pay-off Date


1 Year
$4,794.02
Monthly Principal & Interest
$57,528.23
Total of 12 Payments
$1,528.23
Total Interest Paid
Feb, 2015

Well that's quite a lot you are asking for and a good suggestion from my side will be try contact your bank as they also do pass your loan accepting house or property as collateral else only a local will be able to lend you what you are asking after confirming all the details in person  !!!

What is a Hard Money Loan?
Hard money loans are loans specialized type of real-estate backed loan. They lend short-term capital (also called bridge loans) that provide funding based on the value of the real estate acting as collateral. Hard money lenders tend to focus on the value of the collateral property. These loans yield between 10-15% interest.


Some examples
12.5%   http://www.thenorrisgroup.com/hard_money_loans/
12-15% http://wdbfunding.com/hard-money-lending/residential-investors/


What is it I am offering, I am looking for a loan of $56,000 total to be paid back $62,720 in six months or less. If the time is longer then 6 months a extension for up to 6 more months with a fee of 5,000 dollars added. The loan will be placed in first lien position against the property. For those who are not familiar with liens this means you get paid first, then the leftover is paid as profit to myself.

I would like to find someone to do these types of deals with on a long term type basis.

If you would like to call to discuss feel free to (910) 467-8033

House is a
3/2
1050 Sqft
Built in 1971
Cement foundation
Roof looks less then 5 years old.
Windows look less then 10 years old.

House needs updating in general,
Kitchen-
Counters and cabinets
Flooring
Fridge/oven/dishwasher
Bathrooms- x2
Vanity
Showers/Tubs

Inside general
Paint
Doorknobs
Hinges
Light switch panels
Electric plug panels
Carpet/Flooring

Purchase price 30k
Repair Cost 26K Contractor has already gave a estimate
Sales price 87,999 This was the BPO broker price opinion as of 3/19/2014
Profit after cost of sales
26,000

Similar house across the street just sold for 97K in under 2 months.