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  • Are Hard Mobey Rates Too High?

    Posted on 11/8/2004
    The answer is simple. The rates of any loan are only too high if you cannot make a profit by making use of it. When determining whether hard money is the right loan for you, know that the rates will be higher than bank rates for a similar mortgage.

    However, if you or the property you are buying do not qualify for a bank loan, you have two choices: do not take advantage of the opportunity to use the funds on a real estate deal, or pay more for the financing of the real estate. If you can still turn a profit by buying investment real estate using a hard money loan, then do so. Next time, you will have the profits of the first deal to make the cost of the second deal less.
    Posted in Miscellaneous

  • Business Net Worth

    Posted on 11/7/2004
    Business financial statements are a statement of the value of the company. This includes the value of inventory, real estate, equipment, perhaps vehicles or other items owned by the company. It also includes accounts receivable, the value of the years you have been in business and the value of your intellectual property. Search online for corporate financial statements to get a good sense of what your business financial statement should look like.
    Posted in Miscellaneous

  • What Is Your True Net Worth?

    Posted on 11/6/2004
    Hard money lenders do not ask for FICO scores, but they do want a personal and business financial statement. Your financial statement contains your net worth, which can include checking and savings accounts, stock portfolios, life insurance policies, real estate, personal property, timeshare, and more.
    Posted in Miscellaneous

  • Construction vs Hard Money Loans

    Posted on 11/5/2004
    Hard money lenders fund up to 65% of the less er of either the current appraised value or the purchase price of real estate that already has one or more buildings or other improvements on it (golf courses, RV resorts, etc. can qualify).

    If you are building something, your project is 90% complete and you need to pay off construction loans, contractors, etc., hard money may be the right answer for you.
    Posted in Miscellaneous

  • Construction Bridge Loans

    Posted on 11/4/2004
    If you have a construction project that is nearing completion and need to pay off construction loans, contractors, etc., Avatar can help you with a hard money loan. With an Avatar loan, you can pay off the old debt, consolidate, and bridge the gap between construction completion and initial sales.
    Posted in Miscellaneous

  • Choose the Right Loan

    Posted on 11/3/2004
    If you are occupying the house you want a mortgage/loan for, you need a conventional (bank) or non-conforming (beyond-the-bank)loan. Look for owner-occupied residential mortgage lenders.

    If the residence or building is for investment purposes, you need a commercial loan - either a conventional (bank) commercial loan or a hard money loan. Look for direct commercial hard money lenders for the best rates on a bridge loan (1-3 yrs)

    If you have land without buildings on it yet, you need a hard money loan from a direct lender who funds land - look for this in the lending criteria of the hard money lenders you review.

    If you need more than 65% of the purchase price of a property because you are going to rehab it, look for direct rehab lenders. Hard money lenders will lend up to 65% LTV. If you qualify, rehab lenders can lend up to about 70% of the after-fix-up appraisal of the property. This will give you enough to buy the property, fix it and sell it, if you can move quickly.
    Posted in Miscellaneous

  • Why Are Assisted Living Facilities So Hard to Fund

    Posted on 11/2/2004
    Very few lenders - including hard money lenders, are willing to fund assisted living facilities. The reason has to do with the value of the property vs. the value of the business.

    The value of an assistend living facility is almost always extremely high compared to the actual value of the property if it were not being used as an assisted living facility. The value is strongly linked to the licenses and zoning issues that permit the property to function as an assisted living facility. In the event that any permits are lost or zoning ordinances change, the value of the property would plummet. Hence, the hesitation on the part of lenders who understand that fickle nature of local government, as well as the myriad regulatory requirements that such facilities can run afoul of, even without being seriously remiss in the care they provide.
    Posted in Miscellaneous

  • Location and Rates

    Posted on 11/1/2004
    The location of the property you wish to collateralize will have an impact of the number of lenders who will fund and on the rates you will pay. In general, if you have a choice of properties to collateralize for a hard money loan, select a property that is located in or near a city, rather than a rural property. If the property is income-producing, so much the better.
    Posted in Miscellaneous

  • Hard Money Loans Don't Have to be Scary

    Posted on 10/31/2004
    Hard money loans are simply a form of commercial lending. Unencumbered by the myriad laws surrounding owner occupied residential real estate, hard money lenders can run wild and free with their rates, points, lending criteria and more.

    But hard money loans don't have to be scary. When interviewing lenders (and you should), ask clear questions and keep a chart with answers:

    * what is your maximum LTV? * what is your minimum/maximum loan? * what kind of properties get the best rates? * what documents will you need to see from me? * what is the term of your loans? * do you charge upfront fees? * when will I pay due diligence fees?

    With answers in hand, you will know what to expect and how to prepare for a successful hard money loan.
    Posted in Miscellaneous

  • How Much Can You Borrow?

    Posted on 10/30/2004
    Several factors determine how much you will be able to borrow on a hard money loan. The lower the risk, the more likely you will get the maximum loan possible.

    To get the maximum LTV on your loan request at the best rates, your property should be income producing. Be prepared to demonstrate that the property earns or is capable of turning at least a small profit while paying all its bills, including the cost of the hard money loan.

    Additionally, be prepared to provide a clear, reliable exit strategy for the loan. Hard money loans generally have balloon payments which require a refinance. How will you refinance your property?
    Posted in Miscellaneous