Unlock Real Estate Investing

Private Hard Money Loans are the key to unlocking real estate success.  In the highly competitive real estate in major markets across Texas, having access to fast money is essential.

Hard money loans give you the opportunity to jump into the deal.  Look, houses are expensive.  Not a lot of people have an extra $100,000+ laying around.  Private Hard Money Loans open the door to winning the deal.  It is the first step in moving towards profit – you’ve gotta buy the deal!

What is a Private Money Loan?

A Private Money Loan is a loan that is financed by an individual investor or group of investors.

In our case, we use what are called hard money loans.

What is a Hard Money Loan?

A Hard Money Loan is a short term loan that is typically secured by a hard asset – like real estate.

How does a Hard Money Loan work?

Once you get a property under contract, send the property over to the hard money lender.  The lender will then qualify the loan from the property’s ARV (After Renovation Value).

What is ARV?

ARV – or After Renovation Value – is the price that the property could sell for after being fixed up.  It is a market approach appraised value to a finished property.

Why use a Private Hard Money Loan?

This is the most important question!  There are lots of reasons why you would want to use a hard money loan.  The best answer is that hard money loans are typically fast and require less qualifying.  Hard money loans really rely on the strength of the deal to qualify the loan.

There are many times that a property will not conform to the lending guidelines of a bank because repairs that it may need, and therefore will not get funded.  Hard money loans work great for ugly houses that need lots of repairs.

Bank vs. Hard Money

Ok here’s the truth.  Hard Money Loans are more expensive than getting Bank financing.

If you can get traditional bank financing, and want to wait the 30-45 days to qualify, then it can save you money.

However, in hot markets where time matters, hard money loans might win you the deal.

Plus, if the house needs major repairs, the property might not meet appraisal for the bank and you can lose the deal.

``Cash, close in 10 days!``

There is strength in putting in an offer that says “Cash, close in 10 days!”

Hard Money loans typically can be approved that fast and can get you to the funds you need to close the deal.

What is the term of the loan?

The term of the loans are typically 6 months.

There may also be an option to renew for another 6 month term.

Are there prepayment penalties?

No.  There are no prepayment penalties.

What is ``buying money?``

“Buying money” is a term some investors use to talk about how they finance deals.

They look at the fees and cost of the loan the same way you would look at new floors or a new toilet in the house.

Basically if new floors or a new toilet increases the value of the house, then they account for the cost of the material and then take the profit.

The cost of “buying money” is the same.  There might be a profit at the end of the deal.  The cost of the loan was necessary to do the deal.

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Real Estate Investing Strategies

These strategies work great with Private Hard Money!

FIX AND FLIP
Quick Profit

FIX AND FLIP

The idea here is to find a deal.  Most likely you will need to “fix up” the property in order to sell it at a market price.  This is what is called forced appreciation, or sweat equity.

The economic principal of buy low – sell high is a must.  The stuff in-between is important, i.e. the renovation.  Make sure you have a good handle on the budget.  And make sure you build/rehab to match the neighborhood.

 

 

 

RENTAL (BRRR)
Long Term Wealth

RENTAL (BRRR)

Using Hard Money for to buy a rental property is a little tricky, but can be very very effective.  So what is BRRR?  It stands for Buy, Rehab, Rent, Refinance.

This method can be great to get you into a property that needs some work.  After you do the rehab and put a renter in the property you will be able to prove to the bank two things: 1. An increased ARV, and 2. Income.

These 2 items might help you get the property refinanced with a bank at a lower rated and pay off the hard money loan.  Be careful though and know that the bank might only cash out finance 80% of the ARV, so make sure and watch your numbers.

DISCLAIMER: INVESTING IS INHERENTLY RISKY AND IT IS POSSIBLE TO LOSE MONEY.  EACH INVESTMENT IS UNIQUE AND THERE ARE NO GUARANTEES OF PROFITABILITY.  THE INFORMATION PROVIDED IS FOR EDUCATION AND INFORMATION PURPOSES ONLY AND DOES NOT REPRESENT ANY TYPE OF GUARANTEE, EXPRESSED OR IMPLIED.  THIS INFORMATION IS NOT A SOLICITATION FOR A SPECIFIC INVESTMENT OR INVESTMENT STRATEGY.  EACH INVESTOR SHOULD DO THEIR OWN DUE DILIGENCE AND IS SOLELY RESPONSIBLE FOR THE ENTIRETY OF THEIR INVESTMENTS.  THE INFORMATION BELOW IS IN PARTS AND SHOULD NOT BE CONSIDERED EXHAUSTIVE.