Have you ever had any experience with hard equity lenders in Tacoma WA? Then you would know it is not easy to find a reliable top hard money lender. Especially the first time around.
What are hard money loans? Hard money loans are a form of loans that are acquired to perform transactions ins situations where there is a need for rapid turnaround. A good example would be fix-and-flip buying.
On the other hand, local bank loans are acquired in situations where a real estate property will be under custody for quite a long stretch of time. It is easily possible to achieve rapid turnarounds using hard money loans due to no bureaucracy in the middle. In fact, hard money loans can be acquired in days, at times as few as three days only!
There are many firms and companies that offer hard money loans. Here are the top tips through which you can select a reliable private hard money lender for your funding. Follow these tips and make your hard money transactions a tad bit easier.
1. Search for companies that are known to offer “hard money loans”
The requirements and the servicing for the hard money loans is a complicated process and need the assistance of a hard money expert. Moreover, a credible hard money lender is experienced in structuring all forms of loans to help the desired outcome for both the lender and the borrower.
Hence, you must acquire hard money loans only from companies that specialize in it. They know what they are doing!
2. Narrow down your search to local companies
The majority of the hard money lenders have a requirement to inspect the real estate property for which you are acquiring the loan. Hence, it would be a smart idea to search for lenders locally rather than on a national level.
Even though there are certain hard money lenders who offer services at a state or a nationwide level, however, these companies or lenders are not too flexible relative to a local lender.
3. Emphasize complete transparency
Regardless of the number of parties involved in the deal, every member who is involved should be given full access to the loan data and information while the hard money lender must abide by the guidelines.
Stay alert regarding lenders who lure parties in with teaser loan rates that in reality are not possible!
4. Always verify the company’s license!
The most credible hard money lenders have a valid license acquired from the respective Department of Real Estate. They should also be registered with regulatory organizations for instance the Nationwide Mortgage Licensing System and Registry.
It is your right to ask the lender to provide you with proof of license. Once you have the license number, you can go online to see if there have been any complaints filed against the lender. Make sure you browse through the lender’s profile on LinkedIn and check their website. Everything should appear legit.
5. Figure out your own requirements for the hard money
There are multiple types of loans available in the market to get the financing for the hard money. The hard money lenders specialize in transactions for investments, residential, or commercial properties.
So when you submit your application to the hard money lender, give the address of the property, among other crucial details such as the deadline or the closing date, the purchase cost, any renovation required, predicted renovations after the home inspection, etc. Make it easy for the lender to scrutinize your loan application.
6. Understand the importance of the loan: value ratio
The hard money lenders take the current property as the collateral if it is sold on the same day. So they have a restricted approach to the value. Hence, you must get your math correct regarding the loan and the value of the property ratio.
7. Create links with top real estate professionals
The local real estate experts, agents, real estate attorneys, etc network with multiple property lenders in the area and can be used to locate potential hard money lenders in town. So, try to create connections with such people and get your job done.