What are the qualifications you must have in order to get a loan from a hard money lender? for example Good credit, collateral or a certain amount of money in your bank?
What are the qualifications you must have in order to get a loan from a hard money lender? for example Good credit, collateral or a certain amount of money in your bank?
Good question. They are all different in what they require. The biggest requirement is the deal makes sense and you can make money with it. Credit can be important, but not a deal killer. Not like with a regular bank. They will want to see some money in the deal for down payment, either 10 or 15 percent of the purchase price. When they finance the repairs they usually pay it out in draws after the work is done. They do not give you all the money upfront. The loan will go againts the house you are flipping.
So they only finance 85 percent or a little more of the houses price? So basically you can go to a hard money lender with a business plan and a financial lay out of how much the costs are to fix the house and how much you could sell it for after. With this information you could be able make the deal and get the loan from them? It sounds really risky on the lenders side but I am sure they have their ways of making it always beneficial for them. P.s If you have time check out my vidoe on how I house hacked my first investment property. Thanks
The hard money guys will make sure there is enough room to flip the house. If the deal goes bad they can foreclose on the house. They should have enough room to be fine.
They usually fund 85 percent of the purchase and up to 100 percent of the repairs. You can find guys who will do a higher percentage of the purchase but they charge much higher rates.