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  • Do I Need Hard Money?

    Posted on 11/29/2004
    If you need a loan for a commercial or investment residential property purchase or refinance, check with your local bank. If the bank says no, you need a hard money loan. Banks may say no due to the nature of the property, the business use, or your personal financial scores.

    If the bank almost said yes, contact Avatar, a direct lender with rates among the lowest in the industry. If we can't fund it, we'll point you in the right direction to get your specific loan funded at the best rate you can.
    Posted in Miscellaneous

  • Hard Money Mistakes - #7

    Posted on 11/28/2004
    Not shopping for a loan. There are many hard money lenders. Avatar's rates are among the lowest in the field. However, your loan request may not fit our lending criteria. In that event, you'll need to pay more for the loan. But it would be a mistake to simply take any offer without checking to see if others can offer it for less. Call or email Avatar with your loan request. If we can't fund it, we'll be happy to refer to the best lender for your needs.
    Posted in Miscellaneous

  • Hard Money Mistakes - #6

    Posted on 11/27/2004
    Not being prepared. Loan requests accompanied by photos and financial operating statements for the last year and YTD for this year get funded at a rate of better than 2:1. Be prepared. Have short, simple Profit and Loss statement for the property if it income producing. Have a net worth statement for yourself and the company. Take photos of the inside, outside, and the neighborhood. You'll be miles ahead of others trying to get the attention of lenders.
    Posted in Miscellaneous

  • Hard Money Mistakes - #5

    Posted on 11/26/2004
    Assuming that those who advertise as lenders are really lenders, not brokers - or worse, not even brokers!

    Avatar Financial Group is an institutionally funded lender. We work with honest brokers who charge their clients fairly for their advise, knowledge, and services. But, many people 'out there' advertise that they are lenders when they are not. The scam the public by taking large sums of money up front and not funding the loan. In commercial lending, anyone can hang a shingle and be a broker. Residential lending requires a broker's license. If you are trying to fund the purchase of or refinance a commercial property, be sure you are dealing with a lender, not a broker pretending to be a lender. Call Avatar at 888-886-0097 and ask for Gillian. She will explain three simple ways to tell whether you are talking to a lender or a broker.
    Posted in Miscellaneous

  • Hard Money Mistakes - #4

    Posted on 11/25/2004
    Assuming the price is the price is the price. The cost of hard money loans generally fluctuates with the prime rate. Most hard money lenders will define their rates as: prime + x%, but not less than XX%.
    Posted in Miscellaneous

  • Hard Money Mistakes - #3

    Posted on 11/24/2004
    Assuming that a Lender who offers the good price thisloan will have a good price on thatloan – or even able to offer other loans.

    Hard money lenders tend to specialize. Almost all will fund income producing commercial properties up to 65% LTV. Beyond that, ledners specialize in risks in which they have a great deal of knowledge and experience, which enables them to select and manage loans in that field. For example: some will lend on gas stations, other will lend on raw land or land development, construction, hospitality, assisted living facilities, etc., etc.

    Determine the special nature of the loan you are looking for. Ask an experienced broker to assist you (fees will apply) or do the research on your own to determine which lender can lend on your property and which will have the best rates for your scenario.
    Posted in Miscellaneous

  • Hard Money Mistakes - #2

    Posted on 11/23/2004
    Expecting to get 100% LTV financing on commercial or investment residential properties.

    Hard money lenders lend on commercial and investment residential properties - some lend on raw land as well, but they tend to lend up to 65% LTV with "v" or "value" being defined as the lesser of the actual price you are paying for the property or the appraised value. If you are buying a property for $1,000,000 and it is appraised at $2,000,000, you are getting a good deal, but you will still only get $650,000 on a hard money loan.

    Of course, there are few lenders who will step up to a slightly higher amount, but expect to pay 8, 10 or more points up front for that priviledge and as much as 20%+ interest rates. The risk is large and the lender will charge accordingly.
    Posted in Miscellaneous

  • 7 Mistakes To Avoid in Hard Money - #1

    Posted on 11/22/2004
    Asking 'how much' without telling the lender the 'whole story.' Hard money lender rates are directly proportional to the risk involved with a loan. Risks include: you, the lender, the property type, location, amount of the loan, LTV request and more.

    When requesting quotes, be sure to include as much as information as possible about your loan - including and especially all the 'warts'. You'll get faster more reliable answers.
    Posted in Miscellaneous

  • Digitize Property Photos

    Posted on 11/21/2004
    The fastest way to get info to a hard money lender is by email. When making an initial inquiry, digitize your photos and email them along with your request. Loan requests accompanied by photos and financial statements get funded on a better than 2:1 ratio over requests that 'stand alone.'
    Posted in Miscellaneous

  • Mixing Personal Use and Investment Properties

    Posted on 11/20/2004
    Hard money lenders require that borrowers have a minimum of 20% equity in the collateralized property. The collateral can come from cash or equity in other real estate property. You can use commercial or even residential property, so long as the proceeds of the hard money loan are used for business purposes.
    Posted in Miscellaneous