Starting an investment business in Real estate is challenging and beneficial at the same time. If you don’t know where to get the funds you can use to invest in a property then you can always get a hard money loan or also called the private money loan. Yes, I know it sounds creepy to get a loan but don’t fret since hard money loan is not that strenuous to digest.
Steps in getting a private money loan:
First step is to pre-qualify for a hard money loan. How to do this? Find the best lender in town, set-up a meeting schedule and talk to them about your loan concerns. Listen to theirs too and see if you can deal with their offer and it fits your wants and needs in a loan.
Step 1: Pre-qualify. Find a lender you prefer and talk to them about your concerns then see whether they will give in to your demands and if you could meet their requirements as well.
Step 2: Once you have found the property you want to invest in then you can now call your hard money lender and inform them of the prices you have on hand for your property. Make sure you include all the prices and fees such as the contract price, the repairs and improvement costs. It’s a must to also let your lender knows the value of the property after the rehabilitation, whether you’ll get huge profit or not. They should know these things to keep you eligible for the loan. The lender will then send you their appraiser that will check your property and soon give you the appraised value of it. Once they have given you the appraised value, you’ll get an idea of how much interest you are going to pay on top of the loan you got.
Step 3: Prepare the requirements. A hard money loan is easy and more efficient compared to a normal bank financing. The private lenders can approve your loan request in just less than a week but that is if you could provide them all the requirements they need. Start by showing your collateral which is the property that you would buy then show them the entire budgeting plan you have prepare including all the fees and costs you would need. After that, secure copies of your statement of accounts just to prove to your lenders that you can pay the loan you got. What makes hard money loans better than bank financing is because they don’t give too much bearing on your credit score though you still need to present it to them in case you are in need of more supporting documents.
Step 4: The contract. Securing the contract of the loan is very important hence make sure everything is legal and all the interest rates and the money you’ll need to return is fixed and it should be stated in the contract together with the all rules and regulations of the lenders. This for the assurance of both parties.