Private Hard Money Personal Lender Guide
A Private hard Money Personal Lender issues what is referred to as asset-based loan financing. In other words the loan is secured by some form of real estate “hard property” like a house or land. These types of loans usually carry higher interest than conventional loans, because quite frankly private hard money lenders are in this specialty to make as much money as possible from distressed properties.
Regular banks aren’t really known to specialize in these types of loans. This is a private lender’s playground – and you must seek them out to strike up a deal with them under their terms.
Typically, you can expect to get 65% or less of the After Repair Value (ARV) of property.
These types of lenders lend conservatively because it safeguards them in case you default on the loan. Also, everything is designed for quick-sale which is why they make loan deals on the low end – so just in case you default they feel confident that they can sell the property For 60 -70% of value fairly quick.
Seeking a person Private Money Lender is a consideration especially if you are facing tough situations like foreclosure, arrears, bankruptcy, or if you’re a Real Estate Investor with potential property deals that don’t qualify for conventional financing.
A good thing about hard money loans is these lenders will take more than just your credit into consideration – this is equity-based financing so it is more so based on the value of the real estate involved. They work to seek ways to approve you rather than turn down your application.
Overall, a loan from a private hard money personal lender can be just the thing you need to rescue you from a distressed property. Conventional lenders are usually unwilling to loan on a property that needs more than minor cosmetic repairs. But Private Hard Money Lenders salivate over these opportunities!