Hard Money Loan Information

Why would a person invest in a hard money loan?
Most private investors understand the real estate market, real estate loans and mortgages and are looking for a safe and secure investment with a return better than what they will receive from the bank.  Since this types of mortgages are secured by a property with normally 30% - 50% equity, the investor is well protected and receives the benefit of the higher interest rate return.

What is a high-yield or hard-money commercial loan?
High-yield loans (or hard-money loans) are short-term bridge loans for acquisitions, refinancing, turnaround/work-out situations, foreclosures and bankruptcies. Interest rates, although high, are less costly than taking on a financial partner or losing the opportunity altogether.

What types of borrowers need high-yield financing?
High-yield loans are ideal for borrowers who are unable to obtain funding through a conventional source. The properties or the borrowers are often clouded by legal or operational problems, and "Hard-Money" lenders can often help solve the problems and get the property repositioned for a conventional refinance.

Why is it so expensive?
Clients pay for service and time. The "Hard-Money" lenders that we can refer you to can get through complicated deals quickly, often closing within 10 days after the completion of their due diligence. Because the upside realized through this type of funding is so significant, the interest rate rarely becomes an issue for clients who understand that they are paying for a valuable service.

What property types will Hard-Money lenders consider?
All hard-money lenders are different. The hard-money lenders we refer clients to will usually consider income producing properties such as apartments, condo/co-op conversions, retail/shopping/strip centers, mixed use properties, industrial, office buildings, hotels/motels, medical, mobile home parks and restaurants, as well as non-income producing properties such as land acquisition, development and construction, bank workouts, foreclosures and bankruptcies.

Will Hard-Money lenders consider a 100% financing loan request?
Often a borrower will go to a lender with a legitimate and competent business plan, a good piece of Real Estate and a loan request that is what would be described as "pie in the sky". No money in the deal, poor financials of the borrower, etc. How is the borrower capable of maintaining debt service? Have they been involved in commercial real estate before? Why would a lender take a huge risk or exposure and make a loan for a borrower like this? This type of loan request most likely will not get funded, whether by a conventional lender or a hard-money lender. There are still many "no-money-down" commercial real estate mortgage loan requests that we see on a regular basis. However, funding for "no-money-down" have gone the way of the 1980's. Today's private lending firms are about service. Not about 100% financing. Borrowers come to us looking for help because they have a problematic or opportunistic loan request that needs to be funded in a short time frame, typically within 30 days or less.