Hard Money Information And Tips

If you’re looking to buy a distressed property or fixer-upper, it’s not uncommon to seek out a hard money loan or “bridge loan” - especially for highly-competitive real estate markets, when you don’t have the time or the luxury of waiting for the bank before you pounce on a good deal. But not all distressed property deals are good deals. How do you know what to look for and what to avoid? Let’s take a closer look: Foreclosure Auctions A foreclosure auction is one in which properties are auctioned off to the public and are sold to the highest bidder. It’s common for lenders to bid on the full amount off their loan in order to recoup their losses, but the big attraction of foreclosure auctions is, of course, the excitement of winning. The successful bidder could very well obtain a below-market price for the property, however buying up foreclosed properties is not for the beginning bargain hunter. Even with the prospect of a below-market price, there is the possibility that the tit...

If you love the thrill (and the profits) that come with fixing up and flipping a property for sale, then you know you’re always on the lookout for how to get the best possible deals. When it comes to ultra-competitive markets like Portland and San Francisco, investment opportunities can be gone in a blink. Even in less-competitive markets, it may be easier to find properties, but your profit margins are smaller. This means that not only do you have to be skilled in uncovering lucrative real estate investment opportunities , but also in negotiating the best possible rates for those properties. Fortunately, all you need to do is follow six proven negotiation strategies. And the best part is, they work with any kind of real estate investment, including MLS-listed properties, auctions and short sales. Do Your Due Diligence No great battle was ever won without a thorough and strategic view of the battlefield, and the same principle applies to real estate investing as well. The last ...

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...

Oftentimes, people looking to purchase residential properties for sale in California look to hard money loans to help them get the financing they need when a traditional loan falls through. While new rules and regulations were originally meant to discourage subprime lending and irresponsible lenders, they can also affect potential borrowers. One of the biggest attractions many borrowers mistakenly believe about hard money lending is that they are not subject to the same regulations as loans from the bank. People believe that they can avoid having to show proof of their income. The truth is, income documentation still needs to be completed, it’s just that what counts as “income” can vary with hard money loans. Understanding Income Documentation on Hard Money Loans Consumer lending on residential property (ranging from 1-4 units), requires income documentation. Your hard money lender needs to be able to document your income and insure that your debt-to-income ratio is in line. I...

In the Los Angeles metro area, the real estate market is thriving and showing no signs of stopping, according to the Winter/Spring 2018 Allen Matkins/UCLA Anderson Forecast survey for Commercial Real Estate. Although the survey does point to a decline in the retail sector, this is offset by the spike in demand for e-commerce services. The market is further helped along by recent tax overhauls, ongoing job growth and a thriving gross domestic product. A Hungry Office Market in Silicon Beach  From Hulu to Youtube, Google to Snapchat, today’s top tech companies are looking at an ocean view, and there’s none better than Silicon Beach. Close to 500 startups, incubators and accelerators alone call cities like Playa Vista, Santa Monica, Venice and Culver City home, and it’s easy to see why. Vacancies for commercial office space continue to decrease amidst hungry demand and increasing prices, making now a great time to capitalize on the huge surge in jobs among tech, streaming and...

When it comes to understanding the difference between hard money loans and private money loans, it’s understandable to have many questions. But fortunately, when it comes to real estate, the two terms are often used similarly. Let’s take a closer look: In the real estate investment industry, a hard money loan refers to a loan that is not regulated by the government or other financial institutions or organizations. When buyers talk about taking out a “private loan”, they are generally referring to a hard money loan. Why Are They Called “Hard Money” Loans?  Unlike traditional conventional loans, which require specific income levels, credit scores and other types of eligibility requirements, hard money loans look at the LTV or “loan to value” ratio. This is the amount of equity that the borrower has in the property. Generally speaking, borrowers can be approved for hard money loans when their LTV is 70% or lower. The lower the LTV, the better, since it demonstrates to poten...