You want to put an offer down in the hot housing market and your next step is finding the funds. A hard money lender that’s the real deal can be a challenge to locate, but it may be the best option to finance your flip. There are different ways to find a reliable hard money lender and several facets to look into that you need to keep in mind for this non-conventional loan process. Searching online, checking out a real estate investment club, or asking small business bankers in your area are a few ways to find money for your real estate investment. Here are some things to keep in mind when exploring your options.
Hard money lenders vary; it could be a single person, a small firm, or a large company that lends to investors. All lenders will usually focus on short-term loans for real estate purposes, ranging from a few months to a couple of years for it to be due back in full. Each hard money lend will have varying rates and terms, so make sure to ask for their rates and fees to find a loan that is workable for you.
There are several options for physically finding the lender that is right for you, but it is important to do the research so you end up with a viable lender.
One of the best options is to ask your local real estate agents. They may have worked with some hard money lenders or may know of some in the area. Checking out real estate investment clubs in the area is also another good resource, and provides a promising networking opportunity that could lead you to the right person.
Small business bankers and mortgage brokers are two other business groups that may know of hard money lenders. Brokers get paid to find you a loan so they probably have a great contact list they could provide you with for your situation. The only pitfall of this option is that it will cost you, but it may be worth finding a referred and legitimate lender.
When looking for anything, our first instinct is to ‘Google it.’ Searching the web for a hard money lender is a good idea but make sure to research the results and get the facts for each option. One website, BiggerPockets.com, has a directory dedicated to money lenders; look through to see if there is one in your city. And though Craigslist has come under scrutiny, it could provide local resources, just look into the postings and be smart about the findings.
Hard money lending is an option for real estate funding and could be right for your next purchase. Hard money could help turn your real estate dream into a reality, and to keep it from turning into a nightmare, do the research! It is important to delve into the process and locate the right money lender for you and your short term funding option.