OfflineI read a forum a minute ago about financing scams which gave me the idea to write this forum and give some additional details that I feel will help some people.
A common scam that hard money lenders are running right now is to ask for an "application fee" or suggesting that an "appraisal" is required up front.
Companies will ask for this money up front such as for the appraisal, show you no work completed then say that the home did not pass appraisal. By saying that appraisal did not pass they keep your fee and they do not need to fund your deal.
Are all companies that ask for upfront fees bad? No. But it throws up a giant red flag. This is especially true with companies that are asking a very large upfront fee.
I have paid $20-100 for an application fee. An appraisal usually goes for $350 -$550 but larger costs than these can really scream - watch out and do more research.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
...to have a list of reputable HML's, that you'd care to share?
Bryant Slade
The best HMLs to use are the HMLs that are LOCAL. Go to LOCAL REI club meetings and find out who the active investors use in the LOCAL marketplace. A lot of times a HML will be a vendor at the meeting!
Why LOCAL HMLs? They know the market, they know the areas and neighborhoods. They have their own LOCAL appraisers. They don't charge for the appraisal.
The average rates are 4 points, 15% interest only, 9 or 12 month balloon.
They expect to see at least 6 months of interest payments in your accounts. (liquid assets)before they will loan. They will do a quick credit check to make sure you have no bankruptcies or foreclosures or history of late payments. They will need to see your rehab/repair estimates.
Good Luck,
Michael
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
Why LOCAL HMLs? They know the market, they know the areas and neighborhoods. They have their own LOCAL appraisers. They don't charge for the appraisal.
The average rates are 4 points, 15% interest only, 9 or 12 month balloon.
They expect to see at least 6 months of interest payments in your accounts. (liquid assets)before they will loan. They will do a quick credit check to make sure you have no bankruptcies or foreclosures or history of late payments. They will need to see your rehab/repair estimates.
Good Luck,
Michael
I agree. The points and interest may be a little different per hard money lender but in all this is true.
One more note: Really good hard money lenders do not have a preferred interest time such as 6 months. Why? Because if they can get you to pay off their loan quickly they make more money. The points they charged at the beginning of the loan will increase their ROI if you pay them quickly.
My favorite area to obtain hard money lenders is from foreclosure auctions. Most foreclosure auctions are a cash transaction. Because of this you will need cash to buy at the auction or very shortly afterwords.
Either the person bidding at the auction has hard money or is themselves a hard money lender.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125