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A hard money loan works as an asset-based loan, meaning that while hard money lenders take into consideration the investor’s credit score, this is not a crucial factor in determining his or her eligibility. Instead, lenders require that you use real estate property as collateral.
They use the price of the property to calculate the risk of the loan and the Loan to Value (LTV). On the other hand, real estate developers, investors, and flippers use hard money to get the required funds to close time-sensitive deals where they can get a property at a low price, flip (fix) it, raise the value of the property and then sell or rent at a profit.
The main reason real estate investors choose to apply for a hard money loan is that private lenders can fund the deal within a week–or less if the borrower meets all the qualifications.
HML’s work great on short-term flips and rehabs, or for first-time purchases, yet on longer-term investments, HML’s are not the best idea.
Hard money loans also work similarly to bridge loans. They both have similar criteria for lending. Bridge loans are solely for buying real estate properties or investment properties that don’t qualify for traditional lending programs. A bridge loan can also be used as a down payment for a new home when the buyer hasn’t sold their current house yet.
Bridge loans can be issued by traditional and private lenders, and HMLs are only issued by private lenders, like Bull Venture Capital.
Hard money loans also work similarly to bridge loans
If you want to learn more on how to get a fix and flip or hard money loan, call us we would love to answer your questions.
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If you have questions about this process call our office and/or review this guide: Reasons to Refinance Your Rental Investment Property.
A borrower seeking a hard money loan must meet the following generally stated requirements. Specific minimum requirements are set following our receipt of a loan application.
A hard money loan (HML) is a short-term financing solution, issued by private lenders, that allows real estate investors to obtain capital fast to develop, flip, or own properties directly.
A hard money loan is secured by the value of the subject real estate property, not by the borrower’s credit score. That’s how hard money lenders protect themselves against default by the borrower. Therefore these short-term or bridge loans can be obtained rather quickly. “Hard money” is a term used mostly in the U.S. and Canada where this kind of loan is common. Fix and flip or rehab loans are just like hard money lending.
Unlike a traditional mortgage, hard money loans are not issued by traditional banks. This type of loan is only issued by private investors.
No, we only lend for residential investment properties.
Each case is unique and is evaluated individually based on the property type, cash flow of the property, your credit history, etc. Fill out our application form for a free quote.
Yes, we can fund your clients with tax liens. We understand tax liens and have closed multiple transactions with tax issues.
Not at this moment. Only first mortgages.
We assess the general market value of the property based on a number of factors, including: comparable sales, condition of the property, renovation that’s taken place, location, type of property, and a number of other criteria.
Not at all. All we need to start is a filled application form.
Based on the value that Bull Venture Capital determines we lend up to a maximum Loan to Value ratio of 90%. For example, if the property is worth 1 million, the loan amount could be $900,000.00
We lend in all 50 states. We are based in Newport Beach, CA and we serve all major cities in the United States.
We get funding done as fat as 5 days and have been cataloged as one of the top fix and flip lenders.
Our offices is Corporate office is located 2901 W. Coast Highway Suite 200, Newport Beach, CA 92663
No Appraisal Loans reduce much of the hassle involved in a line of credit, as no appraisal is required for the property when dealing with the approval of the loan. A loan of this nature is ideal for those borrowers who seek quick financing, as the absence of appraisal accelerates the application and closing process. This type of loan is usually favored in those situations where not a moment can be wasted, such as in competitive real estate markets or during refinancing. Lenders who offer no appraisal loans base their decision on other factors, such as the borrower's creditworthiness or the property's existing equity. This flexibility enables investors or homeowners to look over the traditional phase of appraisal, thereby reducing delays and saving on appraisal fees.
No income documentation loans are ideal for borrowers who are self-employed, real estate investors, or have a fluctuating income. No-income documentation loan lenders depend on assets, or the property's value when deciding upon the eligibility of the borrower. In this way, borrowers who may not have stable, documented income could also finance their house purchases, refinancing, or investment properties. The loans with no income documentation speed up the approval processes, and for that reason, they are a great option for those who need fast and flexible funding without inflexible demands from traditional mortgages. This loan gives options to people with financial capability but no traditional income verification.