Hard Money lenders

Mr Smith, a retired home owner who owns his home free and clear, discovered that the house next door is up for sale by a bank as a REO. That same house sold 2 years ago for $548,000. At that time Mr Smith’s pregnant daughter and son in law were eager to buy but could not qualify since they are self employed. The bank who foreclosed on the house is listing it for $275,000 and Mr. Smith would love to have his daughter living next door. Since neither he nor his kids qualify for a bank loan at the present time an alternative solution will be to purchase the house using private funds otherwise known as a hard money loan.

The consideration is clear; the price of the house is almost what it cost to build a new home, the son-in-law’s business is more established and in 12 month he will be able to show enough income on taxes and thereby obtain a conventional bank loan. This is a good exit strategy to pay off the hard money loan. More importantly for Mr. Smith is that he will be able to play with his grand kids every day.

Mr Smith can get a hard money loan using the equity in his home. The loan will cost more than a conventional loan (about 3-6 points versus 0-2 point with the conventional loan). Mr. Smith presented an all cash offer to the seller and was able to get the house at the even better price of $265,000 and thus offset all the costs and higher rate associated with this hard money loan. Since the seller was eager to get rid of it fast he preferred the all cash offer over other offers that were contingent upon financing.

In the past 2 years, real estate prices across the country dropped down to very low levels. The decline may soon taper off and by the end of 2009 there will be many opportunities to buy properties at very attractive prices. Unlike the “no down payment, get rich quick schemes” of the past, today only strong cash buyers are able to buy investment properties at bargain prices. (A person can still buy his own home with very low down payment providing he shows income and good credit but normally he is unable to buy more than one property).

More and more we can see those once in a lifetime kinds of opportunities to buy a properties at even below replacement costs. To take advantage of this situation, a hard money loan may be the best and only way to capitalize on those unique golden opportunities and situations that may never again be possible in our lifetime.

This applies well to borrowers who have strong equity in their property and yet cannot obtain a bank loan in a timely manner or cannot obtain a bank loan at all. If the piece of real estate is owned free and clear, or if it has a lot of equity, a hard money loan can be arranged with private investors’ funds.

The most common reasons to seek hard money are:

• Need a loan quick.
• Does not have tax returns proving all the income.
• Poor credit (but most hard money loans are arranged for borrowers with good credit).
• Unusual credit/income situation.
• Unusual property or property condition (e.g. unfinished construction).
• Cannot obtain a bank loan despite several attempts.

There are 7 vital steps to ensure the best and most optimum hard money loan. Skipping any of the steps may result in not being able to obtain the loan in timely manner or ending up paying more than was needed. These steps are detailed at the http://www.lendinguniverse.com . The second step involves searching for hard money investors – it is vital to search everywhere.

Since hard money loans are funded by private investors one should look for local hard money lenders by googling “hard money lender my city name” or “hard money lender my state name”. For loans of over $500,000 a borrower can also search general terms to get the nationwide lenders by googling “hard money lenders”, “private real estate loans.” It also advised to add property type. E.g. “commercial hard money loans” in case the property is commercial or “land hard money loans” etc.

Note: Exactly how to search and how to track the different lenders and offers is part of the sophisticated yet simple-to-use the free software that our website offers. Borrowers are able to track hundreds of offers, negotiate and compare it all from one single control center. Social security numbers are not needed for the initial request. The precise timing of when a borrower needs to provide confidential information is detailed on the website. Using it borrowers can avoid, or at least reduced, the pitfalls and anxieties normally associated with getting financing and thereby get the most optimum loan possible. In the past 10 years the website has provided software to help find and tack loan quotes by hundreds of lenders, brokers, private investors, and banks. Lendinguniverse.com is neither a lender nor a broker it is a lending portal and a market place for hard money loans. It does not endorsed any bank, lender, broker, private investor, or any other entity connected with arranging loans. Start here to secure your loan!