If you’re trying to get a loan to fix up a property to flip, build a spec home, or invest in a property, chances are your first stop was a bank or credit union. Going through banks is easy if you’ve got great credit and a flawless financial history, but if you’ve been turned away like so many others, or if the approval process through the bank is going to take way too long, you may have become interested in finding a hard money lender for your financial needs.
With all the available options out there, it can be difficult to choose if this is your first time looking for a hard money lender, especially if you’re not sure what to look for in a private lending company. With these types of deal, it’s important to know what qualities to look for to find a company you can trust, that will ensure your transaction is done quickly and efficiently. So what qualities should you look for?
When working with any lending company, you want to make sure they have adequate experience, and specialize in the type of loan you’re looking for – in this instance, private or hard money loans. Avoid lenders who claim to handle all types of loans, as they typically will not have knowledge of all the specific, complex origination and servicing regulations to originate the best loan possible for you. They should be able to be as transparent as possible with you about all the terms, regulations, and options available to you, and should be able to provide guidance to facilitate a win/win scenario for all parties involved.
When looking for a hard money lender, you should make sure that the lender is attentive and responsive to your needs. They should be a second pair of eyes when going over documents, the property value, and agreements with contractors – essentially, you should be able to trust them as one of your resources for the property plan, not just your lender. They need to be able to close the deal fast, accurately, and provide advice on how best to handle all deals when it comes to the property to get the most value out of the deal.
Organization And Reliability
You’ll find in your search for a hard money lender that some who claim to be knowledgeable and experienced in the field of hard money lending aren’t actually very organized and don’t know very much about the business. There is a detailed, step-by-step process involved with every transaction they deal with, and they need to be organized in order to complete the deal as quickly and efficiently as possible. In addition to this, you also need to make sure they are reliable. Your reputation (or your wallet) can be effected if you choose a lender that can’t keep the promises they make, when it comes to getting you closed.