Real Estate Investor financing is one of the trickiest parts of getting into this business. It is not readily available, and is difficult to navigate. Last week, I hosted part two of my six part webinar series. The topic was financing. If you have not seen it, you can watch it on YouTube here. If you would like to register for the future webinars, click here.
Dean Lontos, a friend and mentor of mine with Bay Mountain Capital, hosted the webinar and discussed much of the terminology and common practices. I am working on a strategic program to offer financing to real estate investors on a large (100’s of millions) scale, nationwide. I would love some feedback on what you need in a finance product. Please complete this survey.
Over the next several weeks, I will post about the types of financing I know of, and try to give you a 20,000 foot view. Today, we will start with the most expensive, Hard Money. If you want these articles emailed to you as I write them, make sure you subscribe in the right hand column.
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Hard Money Loans
There are many ways to find a good Hard Money Lender. I have found the absolute best way is to go to your local real estate investor club. You can also check out BiggerPockets or the American Association of Private Lenders. Hard Money Lenders are actually not hard to get loans from, they are just hard to pay back! They are the “loan sharks” of the real estate investor lending process. Rates are typically 12% – 18% with points and fees ranging from 2% of the loan as high as 6%. The good news for newer investors, is that the loans are typically asset based, not borrower qualified. This means an investor with a minimal track record, or limited credit (even bad credit) can typically borrow funds from the lenders. The advantage of most Hard Money Lenders is that they often finance repairs as well.
See you around!