- Personal Finance
Need Money? Private Lender Loan
The Private Lender Loan: What Is it?
The private lender loan, or hard money loan, is a loan that comes from a source outside the banking community. The private lender loan is a loan on a property that requires a substantial down payment, or a property in less than desirable condition that can be restored. In the case of the property that is less desirable, the loan can involve very little money down, or even no money down.
There are links on this page to sources for these loans. Be sure that whatever loan company you go with you do a search on Google to determine if the company has complaints or a long track record of consumer satisfaction. I have tried to assemble companies with good track records but the borrower must not assume safety without doing your own search to make certain the company is without bad comments on forums or has good credentials with the BBB.
Professionals who know how to use these loans and understand whether the commercial or residential real estate market that they are dealing with can use these loans to fix up the property and resell for a handsome profit. For those who do not understand thoroughly the ins and outs of these hard money loans, a rude awakening can be the ultimate result. Why would this be the case?
Well, hard money private lender loans come with high interest rates and come with a short duration. This duration can be from a few months to a couple of years. The loans are made to those who can succeed in fixing and selling, and if the selling does not result, the lender repossesses the house with a handsome increase in the value of the house. These are business loans, not personal loans. If you are not considering a career in this field then please stay away from these hard money loans.
One extra word of caution: Never accept a hard money private loan that is a recourse loan. Always seek a non recourse loan, so that the most you can lose are your rehab costs and original interest and note paid. While it is unlikely that you will owe more than the value of the rehabbed house, you don't want to take any chances.
TV House Flipping
TV house flipping is in vogue again with the advent of a near bottom on low end housing. Of course, low end housing is risky, and you have to know your market, and know your ability to sell what you have rehabbed. It is not that easy to do in many circumstances. But TV personalities such as Armando Montelongo are claiming the ability to get you into property. The course is north of $1000 dollars as I have read and the bus tour with the ability to get hooked up with private hard money lenders is quite expensive. I have heard but have not confirmed that the cost is north of $20,000.
But for some people, at the right time and at the right place, this could be a good deal. For others it will be a loss of crucial savings. I am not at all saying that these programs are a scam but they are buyer beware, and in a few states they are not legal. You have to know yourself, and your ability to fix a property up with minimal cost and have the salesmanship to sell it before the loan terminates or you have paid too much interest. There is no doubt that some have and are becoming wealthy, so just go in with your eyes open. TV personalities can be quite persuasive and have strong financial backing. They are looking to make money whether you do or not.
Hard Money Lender Information. Always Check Your Source for Authenticity
Commercial and Hard Money Lenders
- Scotsman Guide: The Leading Resource for Mortgage Originators - Scotsman Guide
Wholesale Mortgage Lender Search, Mortgage Lender Matrices, Articles and More!
- Hard Money Loans
Information about hard money private equity lenders and loans.
- Open Directory - Business: Real Estate: Commercial: Lenders
- Hard Money Lenders - moolahlist.com
Free hard money lender directory with hard money lenders from all 50 States.
- Small Businesses Try Asset-Based Lending As Bank Loans Shrink - WSJ.com
Asset-based lending, once considered a last-resort finance option, has become a popular choice for companies that don't have the credit ratings, track record or the patience to pursue more traditional capital sources.