How Hard Money "Private" Loans Work - How to Get Them
Private lending is a world unto itself.
Completely different from the snobby banking process we're all used to.
Fact is, using this fast and easy money to solve debt problems is a true "God send" if and when you need it.
While it can come with slightly higher costs, the benefits are through the roof.
I'll even show you how to use them to flip real estate for instant profits.
What exactly is a hard money lender? First off, they're people -- with lots of money.
They lend their money to people and businesses in return for a rate of interest.
They always lend in the form of a mortgage against some type of residential or commercial property or raw land.
They are also called "hard equity investors" or "hard money lenders" or just "private investors".
The interest rate varies but is always higher than "banking" rates.
But it's also without "banking hassles"! When you want a "hard money loan" you won't care about the rate.
You'll only care about the money and the problems it solves.
Which is also what makes them unique.
They solve problems.
How ugly-of-a-situation will they lend on? high debts, bad credit, hard to prove income, no credit, unique property, bankruptcy, foreclosure, commercial purchase or refinance loans, consolidate bills, bank turned you down, etc.
raw land Need lots of money in three days? No problem.
They'll lend to you when nobody else will.
They'll stop foreclosures and bankruptcies and they'll give you money even if you have the worst credit score on the planet.
What's unique about these "hard money lenders" is this.
1) They don't ask for two dozen forms of ID, your DNA and the rights to your children.
They only look at the value of the property or business they are lending money on.
The property is the most important part of their decision.
You, as a borrower, are not scrutinized.
In short there has never been an easier loan to get approved.
No tax returns, no bank statements no letters of explanation.
No nit picking "stipulations".
2) They, alone, make the decision to lend or not to lend.
They don't have to "run everything by" some wicked hook-nose underwriter.
It's usually just one person making the decision.
And they make that decision quickly.
Usually within a day or two.
So how much will they lend you? Usually it's about 65% of the property's value.
So if a home is worth $200,000 they'll lend about $130,000.
The loans are usually interest only mortgages (which keeps the payment lower) and they can close in about 3-14 days! That's fast in mortgage lending.
So let's say you lost your job and you're behind on your mortgage by 4 months.
You just got a "notice of default" in the mail and the lender is going to foreclose on your home.
You have to save your home.
No bank will touch this type of loan.
So, if you have enough "equity" a private lender will pay off your old loan - catching your payments up - giving you a chance to get back on your feet.
Then when you've made a 12 or so payments on time with the private, you might qualify to go back to a lower rate mortgage lender for refinancing.
Here's another example.
Let's say you have a credit score in the 400 range.
Institutional banks won't even talk to you, no matter how much equity you have.
So you get a "hard equity loan" make some payments, get your credit cleaned up in the mean time, and then you refinance the loan to better rates.
But the point is you get your money now! Not later.
Example #3.
You just started a brand new business.
Banks want 2 years of tax returns or proof you've been in business for 2 years.
But you just started 6 months ago! No problem.
A "hard money loan" will get you the cash you need to do whatever: fund your business, pay off debts, or anything you want.
With all of the crazy talk about a "mortgage meltdown" and foreclosures today, private money can be a true life saver for those in need.
Can you buy investment property with a hard money loan? Yes.
One client of mine, with great credit, only had to bring about $1,500 to closing and the private lender gave him enough money to buy the "fixer upper" and lent him the money to fix it up! The house has since tripled in value.
That's pure cold cash in the bank.
Everyone needs to know somebody with good access to private or "hard money" lenders.
You never know when you'll need one.
Find a great deal on a house you want to flip? No problem, private investors.
Buying a commercial building that's worth double what you are paying for it? No problem: private investors.
What makes my hard money unique? If there is one problem with private investors it is that they are very difficult to find.
I'm not talking about the institutional lenders that "say" they are private hard money lenders.
But the real private 'hard money' investors.
If you do a search on Google you'll see tons of people claiming to be hard equity investors, but they are really just institutional banks looking to charge high rates to really good customers.
And those sharks turn down more stuff than they approve, or the lend you so little money you can't make the deal work.
And some are really just looking to steal great deals right out from under unwary clients.
They could care less about lending.
It's scary, but true.
The real private hard money lenders can't be found online, yellow pages, or the newspaper.
Most of them are reclusive, and to be blunt, a little eccentric.
You just have to know them.
You have to cultivate them.
My private investors have taken me over 12 years to find.
When you do find them, you have to guard them like a pit-bull.
That means protection from competitors, and it also means you don't burn them.
Ever.
That's where the trust comes in.
I never B.
S.
them or sugar coat things when presenting a deal.
They're extremely wary people, but if you treat them right and shoot straight, they come to trust your word.
What this does is gets deals done that otherwise would have been turned down.
On top of all that, hard money lenders will lend on properties which are unusual.
They each have their preferences, but if the equity is there, someone will "pony up" and get your money to you.
When you need a private investor, you'll be glad you know one.
Completely different from the snobby banking process we're all used to.
Fact is, using this fast and easy money to solve debt problems is a true "God send" if and when you need it.
While it can come with slightly higher costs, the benefits are through the roof.
I'll even show you how to use them to flip real estate for instant profits.
What exactly is a hard money lender? First off, they're people -- with lots of money.
They lend their money to people and businesses in return for a rate of interest.
They always lend in the form of a mortgage against some type of residential or commercial property or raw land.
They are also called "hard equity investors" or "hard money lenders" or just "private investors".
The interest rate varies but is always higher than "banking" rates.
But it's also without "banking hassles"! When you want a "hard money loan" you won't care about the rate.
You'll only care about the money and the problems it solves.
Which is also what makes them unique.
They solve problems.
How ugly-of-a-situation will they lend on? high debts, bad credit, hard to prove income, no credit, unique property, bankruptcy, foreclosure, commercial purchase or refinance loans, consolidate bills, bank turned you down, etc.
raw land Need lots of money in three days? No problem.
They'll lend to you when nobody else will.
They'll stop foreclosures and bankruptcies and they'll give you money even if you have the worst credit score on the planet.
What's unique about these "hard money lenders" is this.
1) They don't ask for two dozen forms of ID, your DNA and the rights to your children.
They only look at the value of the property or business they are lending money on.
The property is the most important part of their decision.
You, as a borrower, are not scrutinized.
In short there has never been an easier loan to get approved.
No tax returns, no bank statements no letters of explanation.
No nit picking "stipulations".
2) They, alone, make the decision to lend or not to lend.
They don't have to "run everything by" some wicked hook-nose underwriter.
It's usually just one person making the decision.
And they make that decision quickly.
Usually within a day or two.
So how much will they lend you? Usually it's about 65% of the property's value.
So if a home is worth $200,000 they'll lend about $130,000.
The loans are usually interest only mortgages (which keeps the payment lower) and they can close in about 3-14 days! That's fast in mortgage lending.
So let's say you lost your job and you're behind on your mortgage by 4 months.
You just got a "notice of default" in the mail and the lender is going to foreclose on your home.
You have to save your home.
No bank will touch this type of loan.
So, if you have enough "equity" a private lender will pay off your old loan - catching your payments up - giving you a chance to get back on your feet.
Then when you've made a 12 or so payments on time with the private, you might qualify to go back to a lower rate mortgage lender for refinancing.
Here's another example.
Let's say you have a credit score in the 400 range.
Institutional banks won't even talk to you, no matter how much equity you have.
So you get a "hard equity loan" make some payments, get your credit cleaned up in the mean time, and then you refinance the loan to better rates.
But the point is you get your money now! Not later.
Example #3.
You just started a brand new business.
Banks want 2 years of tax returns or proof you've been in business for 2 years.
But you just started 6 months ago! No problem.
A "hard money loan" will get you the cash you need to do whatever: fund your business, pay off debts, or anything you want.
With all of the crazy talk about a "mortgage meltdown" and foreclosures today, private money can be a true life saver for those in need.
Can you buy investment property with a hard money loan? Yes.
One client of mine, with great credit, only had to bring about $1,500 to closing and the private lender gave him enough money to buy the "fixer upper" and lent him the money to fix it up! The house has since tripled in value.
That's pure cold cash in the bank.
Everyone needs to know somebody with good access to private or "hard money" lenders.
You never know when you'll need one.
Find a great deal on a house you want to flip? No problem, private investors.
Buying a commercial building that's worth double what you are paying for it? No problem: private investors.
What makes my hard money unique? If there is one problem with private investors it is that they are very difficult to find.
I'm not talking about the institutional lenders that "say" they are private hard money lenders.
But the real private 'hard money' investors.
If you do a search on Google you'll see tons of people claiming to be hard equity investors, but they are really just institutional banks looking to charge high rates to really good customers.
And those sharks turn down more stuff than they approve, or the lend you so little money you can't make the deal work.
And some are really just looking to steal great deals right out from under unwary clients.
They could care less about lending.
It's scary, but true.
The real private hard money lenders can't be found online, yellow pages, or the newspaper.
Most of them are reclusive, and to be blunt, a little eccentric.
You just have to know them.
You have to cultivate them.
My private investors have taken me over 12 years to find.
When you do find them, you have to guard them like a pit-bull.
That means protection from competitors, and it also means you don't burn them.
Ever.
That's where the trust comes in.
I never B.
S.
them or sugar coat things when presenting a deal.
They're extremely wary people, but if you treat them right and shoot straight, they come to trust your word.
What this does is gets deals done that otherwise would have been turned down.
On top of all that, hard money lenders will lend on properties which are unusual.
They each have their preferences, but if the equity is there, someone will "pony up" and get your money to you.
When you need a private investor, you'll be glad you know one.
