Phone: 240-436-2340
Hard Money Lender in Maryland, Virginia, and Washington DC, Private Mortgage Lender, Rehab Loans
The efficient management of construction escrow is an integral part of a hard money loan transaction. The choice of your lender makes a huge difference in how smooth the process is. Many borrowers who are new to private financing tend to focus on what happens before a loan closes and ignore an integral part of hard money financing – loan servicing.
In the previous article, we talked in detail about the tell-tale signs of hard money scams. They might range from advertising unusually low rates to purposefully obscuring the lender’s cost structure. However, what’s more important is to understand how to avoid hard money scams by selecting a reputable private lender, and this is what we would focus on today.
Financial scams are life’s unfortunate reality, and hard money scams are no exception. As the hard money industry matures, the number of entities that engage in questionable ways of doing business goes up. Unscrupulous practices might range from false advertising and interest-rate bait-n-switch to collecting substantial upfront fees and then refusing to fund a loan.
I had a conversation with a potential borrower a couple of weeks ago. She called in panicked: her closing date was fast approaching but her lender has stopped returning her phone calls. Can we possibly help and close her hard money loan in ten days? A ten-day closing is never an issue so I was optimistic that we can ensure a timely transaction. Until we’ve started digging deeper.
As a local hard money lender, we’re all about sharing our expertise and helping you make money in real estate. We love both learning – and every real estate transaction is a unique learning opportunity – and sharing life’s lessons. Many of our borrowers are the first-time flippers and the vast majority will make respectable profits rehabbing their first property. Yet, real estate investing is not for everyone. Here are the four tell-tale signs that private lenders like us use to differentiate serious first-time investors from those who might not be worth the risk.
In our previous blog, we’ve addressed one of the most frequently asked questions: Is a hard money loan considered cash? Now that we’ve covered when a hard money loan is equivalent to cash and why, it’s time to discuss their differences. In other words, should you pay cash for an investment property or should you borrow money instead? To come up with a strategy that is right for you, let’s discuss the advantages and disadvantages of each way.
Recently I spoke to a brand-new investor who asked us to look at a loan scenario for him. A deal he wanted to discuss was not particularly strong. In fact, my numbers showed him making just over $6,000 in profit. After we talked more, he confessed he was thinking about purchasing the property all-cash, to “test the waters” and “eliminate additional expenses.” Were he to bypass a lender and pay his way with his own cash, his profits would increase substantially.
New Funding Resources
