Foreclosure 102
what exactly is a hard money lender? can i use it with foreclosures, wholesaling, rehabbing? any, all or none?
thanks folks...
Frank
what exactly is a hard money lender? can i use it with foreclosures, wholesaling, rehabbing? any, all or none?
thanks folks...
Frank
Quote:
On 2004-12-27 12:03, frank_pat wrote:
thanks John...
always inspiring
btw how come most moderators and the high posters on the forum are named john... just curious?
Frank
Shoot Son did you not know that only John's are BTO's "Big time operators".
John's are the most important part of life, without John's we would have a mess! LOL
On a more serious side, using HML's are a good source of funds but at a cost. I use them all the time but on re-sales only never long term.
[addsig]
I'd want to caution you against borrowing from friends and family...especially at first. Money between friends and family can start all kinds of trouble, but to a HML it's business.
What I would advise you to try to find is private money. This is money that is likely sitting in some low yield investment such as a money market account or certificate of deposit. Pay these people 10% on their money instead of 1-4% and they will be thrilled!
I personally have not been able to find private money but I wish you luck in doing so.
Hello everyone, I am located in Birmingham, Alabama and cannot find any hard money lenders here. I am trying to connect with other investors who would be willing to loan money and using the properties that I am finding as collateral. I would like to set up shop here in Alabama to do deals as investing in real estate. I have been involved in real estate for awhile. I am currently setting up seminars to educate people on how to invest wisely. I have put together a construction crew, appraisers, closing attorneys, real estate agents, and have developed a relationship with a lender. It is just the mortgage broker that I am dealing with that I am having problems with. If there is any suggestions to what to do next, I would be willing to listen, and would appreciate any assistance that I could get.
I also love this site. I have recommended it to my investors also. Keep up the good work.
A few articles that will help with many of the hard money questions you may have are listed below:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=771
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=551
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=437
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=420
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=414
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=283
Also using TCI's lender finder will help in the location of hard moneylenders:
http://www.thecreativeinvestor.com/LenderFinder-index.html
Using the search function of the TCI's forum area will provide a wealth of information as well.
Hard moneylender's loans should only be used for short-term investments as the interest rate is generally from 10% and higher and points range from 3-10 points at the lender’s discretion. The borrower must pay the closing costs and due diligence and commitment fees (1/3% to 1/2% of the loan amount). Also, third-party reports may include appraisals or environmental reports and must be paid by the borrower.
It's not free money folks; it's convenient money!
[addsig]
Outstanding and welcome mcandrw,
I have used HML for long term in the past but the net cash flow justified its use.
It's just like and investment property, you investigate, research, run the number and make a decision.
[addsig]
A hard moneylender lends money similar to lending institutions but at a much higher rate.
By using their funds to purchase and or rehab the deal
[addsig]
thanks John...
always inspiring
btw how come most moderators and the high posters on the forum are named john... just curious?
Frank
also, can you use a HML for foreclosures and wholesaling? are there any HML's on the forum?
i have not looked extensively yet...
Frank
A HML makes loans based upon a cushion of equity.. not so much the creditworthiness of the Borrower. If you make the paymants, he wins. If you default, he still wins because the LTV is such that he can foreclose and still make out OK.
The rates are usually double conventional rates, plus points, fees, etc. But, a valuable tool if your deal meets the LTV requirements.
All HML's criteria are unique so shop around..... in my experience, many are former real estate investors who have cash, or access to cash and prefer paper investing to stix and brix.
I would like to make a recommendation based on the assumption that you haven't purchased any properties yet - talk to family and friends. Borrowing money from family and friends is a win-win situation (providing everything goes as planned with the investment). It's a win for you becasue you can borrow at a lower rate than a HML and you can provide your personal lender with a pretty solid short term investment.
I purchased a property a few months ago and borrowed $140k from a friend - bound by a contract through a lawyer. The terms were as follows: 10% interest on the loan amount for 3 months, each month beyond 3 was 1 % per month.
I'm not saying that every situation is going to be the perfect one but at a time when I could only find lenders who wanted to lend at 25% of the total loan amount, 10% wasn't so bad. It took 4 months for the rehab and I saved about $20k - thats $20k in my pocket.
thanks again for all your help...
much appreciated.
and to the "John's" on the board... keep shelling out the wisdom, for we sincerely appreciate it.
thanks for the borrowing tips also. i personally do not have any financial connections, as of yet, with regard to borrowing funds. but in time... i am about to start my hunt though for some HML's to see where we can go with things any more advice on this matter would be greatly appreciated...
have a safe one folks
frank
Quote:
On 2004-12-29 08:21, JohnMichael wrote:
A few articles that will help with many of the hard money questions you may have are listed below:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=771
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=551
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=437
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=420
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=414
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=283
Also using TCI's lender finder will help in the location of hard moneylenders:
http://www.thecreativeinvestor.com/LenderFinder-index.html
Using the search function of the TCI's forum area will provide a wealth of information as well.
Hard moneylender's loans should only be used for short-term investments as the interest rate is generally from 10% and higher and points range from 3-10 points at the lender’s discretion. The borrower must pay the closing costs and due diligence and commitment fees (1/3% to 1/2% of the loan amount). Also, third-party reports may include appraisals or environmental reports and must be paid by the borrower.
It's not free money folks; it's convenient money!