Hard Money Information And Tips

Did you know that in 2017, investors flipped over 200,000 single family homes and condominiums? What’s more, over 138,000 investors flipped a single home - the most impressive numbers in over a decade, representing nearly 6% of all single family home and condo sales. But if you invest in real estate, what do these numbers actually mean for your investment values? It’s important to know that whenever you talk about house flipping, you also have to consider how much leverage is involved in this type of business model. Depending on the market, leverage can either increase returns or drastically inflate losses. The Use of Leverage - And What Reports Aren’t Telling You  The report linked above, commissioned by Attom Data in 2017, looked at all the properties sold within a year that used financing. They then took this data to determine what percentage of those homes were flipped. But this also shows a severe hole in their reasoning. The only item they captured is whether or no...

Sometimes, we have home buyers looking to acquire new property, but who are unable to get approved for conventional financing through a bank. And, while hard money loans are often looked at as a “last resort” because of the more favorable terms from banks, it may still be possible to get the financing you need with an owner-occupied private money loan. Here’s how they work and what you need to know: It May Be More Difficult to Obtain an Owner Occupied Private Money Loan Most private and hard money loans were equity-based until 2008, which much of the lending and real estate industries were flipped on their respective heads. Back then, if the Loan-to-Value (LTV) ratio was 60% or less, a lender would issue the loan without being concerned as to whether or not the borrower could repay it. Looking back, this was a very risky venture. Now, hard money lenders need to document the borrower’s ATR –their Ability to Repay, among other regulations and requirements. This means owner-oc...