Today we’re talking about the, “How” and the, “Why” you would use hard money lending to get one of your deals done. It’s actually a really simple process to do, but there are steps that you have to think about to make it all happen.
WHY Use Hard Money For Your Investment Property?
First, why would you use hard money to get a deal done? The rates and points are too high, right? Well, it’s true, they are high, but the number one reason why we use it at Grand Real Estate Investments is for time and convenience.
That time and convenience speeds up our projects ten fold compared to trying to do things the conventional route which can take 60 to 90 days to get a home closed by doing everything with a standard mortgage lender.
The next reason is to get all the money that we need to do the project and get it done right.
Even I started out like this. Often people will go and buy something the conventional route, they’ll put their money down on the house, and then they’ll put more money into the house only to be cash-strapped for a really long time until they can refinance it and get their money out.
And that does work for a few projects, but it’s also hard in the end because if you start putting things on a credit card, you start acquiring monthly payments. Or you can just simplify everything with hard money lending to get that money up front for all the work that needs to be done on the home.
HOW To Find Hard Money Loans
The HOW is actually pretty simple. Just got look locally. There’s a lot of hard money, private money lenders out there. You’ll probably be tempted to start searching online, and you’ll find a lot of national options, but for us at Grand Real Estate Investments, it’s a local game, and it’s a local relationship that you want to build.
So number one, look locally.
Number two, go meet them. Sit down and talk with them to start building a relationship. And inside of that relationship building, you’re going to understand what types of projects they are looking for, and what types of projects they’ll lend on along with how much you’re going to have to bring to the table.
The major thing they are going to consider is your experience. It’s different for everybody. Every hard money lending company and private money lender get to choose how they’re going to do things, including the rates and how much they want down.
The best advice is to start building relationships with local, private money lenders.
The last thing in the, “How” that you have to know is how to calculate your numbers. Once you understand what they want, and most of them are the same, they’ll lend up 75% of the after repaired value.
And they’ll include the repair costs with 10% down.
Those numbers I’m kicking out seem weird right now but once you understand how to calculate all of those things then you’ll understand how to do it with hard money or private money lenders.
But the really cool thing about knowing your numbers in the end, is if you fill out the form at the bottom of the page, I’m going to give you my spreadsheet that we use here in Lane County, Oregon. It’s something we use every single time we’re calculating any of our repairs out, so we know what it all looks like using private money or hard money and how those numbers all work out.
If you fill out this form below, you can stay up to date with what we’re doing investment wise.
You’ll get to get access to our hard money Excel spreadsheet, where you can calculate all those numbers out and calculate your project out.
And you’ll be able to see any project that we do because we’ll be sending them out all the time. So I hope that you sign up.