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Private hard
money lenders can provide many options that banks cannot. Private hard money lenders are mostly concerned about the
value of the real estate being used to secure the loan, with
credit typically being a secondary factor.
With enough
real estate equity, you will usually find private hard money lenders
are able to overlook other shortcomings associated with the
transaction.
Private hard
money lenders invest in trust deeds. Many invest
retirement funds from self directed IRA's, while others invest
cash on hand. Either way, the goal of the lender is to
earn a return on their money that is greater than that which
they can realize through other investments.
The major
benefit to working with private hard money lenders is the
absence of any hard and fast underwriting requirements. If
we can build a package that is able to remove risk associated
with making the loan, we can typically secure the financing
requested.
The easiest way
to remove risk to the private hard money lenders is to have
plenty of equity in the property to be collateralized. If
this is an issue, we can also cross collateralize other property
to bring the equity position to a conservative enough level to
obtain funding.
In some cases,
we can be more aggressive on the equity required. For
example, a borrower who has excellent credit with verifiable
income and a large cushion of liquid assets that can be verified
can help mitigate risk and allow us to secure financing at a
higher loan to value than we otherwise may be able to consider.
Another way we
can mitigate risk is by collateralizing property in "lower risk"
areas. For example, we can likely secure a higher loan to
value on a property located in San Francisco than we can on a
property located in Tracy, Bakersfield or other such localities
that did not hold their value during the recent real estate
downturn.
If you would
like more information, or have a scenario that needs private
hard money lenders, please complete our
private hard money loan form or call us directly. We
are happy to discuss your situation and work with you to find a
solution.
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