Lets not forget that a Private Money Lender has no limitations on their guidelines.

If a Private Lender asks you to:

1. Walk their dog
2. Wash their car
3. Pay up or Rocco will show up...

Then there's a strong chance it's Private Money

Make Love, Not War...

This is an area with which I'm not familiar but about which I should probably know a little something.....thanks to all posting on this topic as I'm getting quite an education.

Please continue......

There's a near infinite number of scenarios you could come across because there are lenders that write checks based on LTV with no questions asked and there are others who want you to show that you can repay the loan. Its still private money because no conventional source will fund your deal. Perhaps your project is in litigation, perhaps your in the middle of construction or maybe you are in foreclosure. In each case an assesment of risk is made and if you can throw something in the pot to reduce the lenders perceived risk, (like a bank statement or proof of income) you can get better terms.

Aaron,
I work with many investors that use hard money because they do not want to access their personal credit. The properties are aquired in Land Trusts and benefical interest is held by the investors LLC.
The hard money lender are loaning strictly on the LTV of the property knowing they will be paid when work is completed and the property is sold or refinanced if the investor decides to keep it as an investment. Many investors do not even try to get a standard loan becuase of the time involved. Most of the hard money lenders I deal with can get my clients to the table in 3-4days.

Why pay hard money/private investor rates if you want to buy based on your own credit. It you plan to do that you may as well go to the bank and arrange a credit line secured by your own personal property. When someone starts asking for W-2 or 1040's then you may as well just get a conventional loan.

Here's a question that I'm not even sure I can phrase properly: If I know someone that wants to borrow but can't get a conventional loan.....and I know someone that is looking to lend private money.....and I put those 2 people together.....can I get something out of the deal?

I am NOT a mortgage broker.....I have only a real estate license. I just occasinally see situations where I could probably put 2 parties together and each of those 2 can make some money. Is is against the law for me to ask for a referral fee from one or both of those involved? I have no interest in doing anything illegal or "under the table".....only asking for it if it's legit.

You may receive a referral fee or commission for bringing a borrower to a private commercial lender without a broker's license. You would come to an agreeable commission with the borrower, then state it in the Loan Commitment. After closing, funds from the borrower is paid to you. This is possible if the lender and your state allows it.

Promise Land.....thanks for responding.

Anytime... I'm always here to help to the best that I can.

Good Luck Mate!

Hey all...great topic!

I'm just beginning to look at hard money as a resource for rehabbing.

Do you have to have secured a contract on a property before getting a hard money loan? Or do you just give them them property/ARV info on the property you're planning to purchase with the money?

Thanks! Robyn

Bringing this back to the top...

Can anyone PM me with the name of a HML that will lend in MA?
Thanks!

Check out www.brokeroutpost.com for a forum full of brokers, lenders and all the hard money lenders, with lots of front and back end points, one can dream of.

need a good HML in NY

I am a mortgage lender and I also recommend going to a hard money lender directly because it is cheaper that way. Loan originators do have to add points to the deal to earn a living. But that is not the only reason.

I am a national lender and hard money is a very local niche. Local companies know the area, know the real values, and know the repair costs. Since a national company doesn't know these local items they have more risk thus higher fees.

I've been in this business to long to make a claim that nobody does it without fees. I'm sure someone would be more than happy to lend hard money with no fees......instead charging 19% and put a 3 year 5% prepayment penalty on the deal. Thus making more money than the traditional....

Never say never

Danny

anyone know of a good private money or hard money lender in Michigan?

Hml's are expensive and eat up a ton of equity in the deal.Private money is much cheaper and usually you give the person a rate of ten percent which they love,because there bank is only paying them 2 to 3 percent.You can also ask them to waive paying them a mortgage fee for in return giving them some of the profit when it sells.

I have also seen it where people do a passive investment and give the investor/agent the funds to purchase a property and rehab it and then give the passive investor a percentage of the profit at closing.