Once you’ve decided to make the jump into real estate investing and flipping properties, you need to find the right hard money lender to work with. If you do a quick Google search, you’ll probably find lots of lenders in your area. First, read as many online reviews you can, not just the testimonials on the lender’s website. Once you’ve narrowed your search down to three or four lenders, it’s time to start calling them to find out if they can work with you on a hard money loan. Here are a few questions you should ask before settling on a lender.
1. Background questions. You need to know how many years of experience the company has working with hard money loans. You should also ask for their real estate license ID number. Look it up at the California Bureau of Real Estate. Make sure there are no complaints against the company.
Make Sure You Understand the Details of Your Hard Money Loan
2. Details of the loan. How long will the term of the loan be? How much do they charge in interest? Points? Other fees? You don’t want surprises when you’re making your budget. Find out what LTV (loan to value) ratio the company works with. Be sure to ask about prepayment penalties, too.
3. Other details. Make sure the hard money lender will fund the rehab costs for the project. Most will, but don’t assume. Finally, ask if the lender will write you a preapproval letter. This will help you get your offers accepted.
Please give us a call at LendingXpress. We’d love to talk to you about how to finance your next project.