HARD MONEY SCAMS HOW TO AVOID THEM

HARD MONEY SCAMS HOW TO AVOID THEM

Loan Approval Without Property Evaluation Before approving a hard money loan a legitimate lend will either conduct physical inspection of an investment property or perform an in-depth assessment of an investor’s loan application details. Since hard money financing”s riskier than a traditional bank loan, hard money lenders won’t approve loans without doing their own homework. Request For An Upfront Fee If your hard money lender asks for an upfront fee, something is just not right. Fake lenders usually ask borrowers to pay a high upfront fee before funding the loan. While hard moneylenders do charge service fees, you should beware any lender who charges heavy upfront fees before closing. Provision of 100 % Funding Some fake lenders will promise 100 percent financing on a real estate property in exchange for the payment of a high fee. Keep in mind, majority of real lenders will only provide i50-155 percent funding of the collateral’s value. If you feel morn hard money lender is making outrageous claims, trust your gut. Excessively Low Interest Rates In most cases, hard money interest rates range from 12 percent to 18 percent. However, if the rates are lower than 10 percent, it may be a major red sign. Honest lenders will clearly inform borrowers their rates. Some tips for choosing a reliable hard money lender Ask a hard money lender for client references. Speak with these clients about their experience with the lender. Conduct proper research on the lender online. Check out their website and customer reviews. Inquire about the Loans they have closed. They should be able to demonstrate a solid track record. Have a personal...
3 Reasons A Bank May Turn Down Your Loan Request

3 Reasons A Bank May Turn Down Your Loan Request

For many real estate investors, banks are the most common and reliable sources for project funding. The process is simple—you choose a bank; submit your loan application along with necessary documentation and then wait for an approval. Sounds pretty straightforward, right? While you may personally know people who got loan approvals within a month, it’s not the same case across each loan application. In fact, you could be sitting months in anticipation only to be rejected in the end. But knowing the fact that banks have certain criterion and there are regulatory bodies in place to enforce that criterion, rejections are inevitable for some people. From poor or low credit score to lack of real estate experience, here is why a bank may turn down a real estate investor’s loan request: Poor Credit Score Whether you need a bank loan for a real estate project or to purchase a home, traditional lenders and banks check an applicant’s personal credit score and history before offering funding. The fact is that an applicant’s credit score reflects their financial worthiness and their ability to repay the loan. Therefore, banks consider your personal and business credit score when evaluating your loan request. If you have a low or poor credit score, there is a significant chance that your loan request will be denied. Insufficient Monthly Business Revenue In order to successfully pursue a bank loan, you need to demonstrate to the bank that you are making sufficient revenue every month. High monthly revenue assures banks that you have the funds to repay the loan. Lack of Business Experience In many cases, an applicant’s...
Fix And Flip 101: Does The Age of A Home Matter?

Fix And Flip 101: Does The Age of A Home Matter?

Flipping properties is a great way to make substantial amounts of money in a short-time period. However, the first step is the most challenging—finding a property that you can practically renovate. Needless to say, flipping properties requires intensive planning, research and analysis of the financial numbers. Before purchasing a distressed property, you must check its condition to ensure you can adequate returns on your investment. Fix and flip investors deal with older properties, typically over 10 years of age. Conducting a thorough inspection of the property is a crucial part of the flipping process as it can help you determine how much budget you need to renovate it. Remember that the older the property, the more upgrades it may need, which means high repair and renovation costs. When inspecting the condition of a 10-plus year old fix and flip property, here are some important things to focus on: Exterior   Start the inspection process with the most visible part of the house i.e. the roof. A good looking roof indicates that the property has been maintained. It also has a significant impact on the curb appeal of the property. Are there any missing, broken or damaged shingles and flashings on the roof? Over the course of time, heavy storms, rain, snow, heat as well as wear and tear can take a toll on roofs. Along with causing water leaks, mold and mildew, a damaged or poor quality roof can be dangerous. Damp spots along the fireplace are a common sign of a leaky roof. In addition to the roof, pay attention to the overall architecture of the property as...
What is The Difference? Short Term and Long Term Loans.

What is The Difference? Short Term and Long Term Loans.

A loan is divided into two main categories that are further divided into different types of loans people opt for. We all keep hearing about short term and long term loans that help people combat their financial crisis and lead a better life. A borrower ask for a loan for various purposes. He or she has to return the amount within a said period of time. A loan has to be paid with interest. These loans have distinct aspects that make them different from each other. SHORT TERM LOANS The time period for short term loans is up to 3 years. These loans include payday loans and flexible loans. Payday loans are borrowed by a person when there is an emergency such as car breakdown. It can also be borrowed when you are taking a vacation or stumble across unexpected bills. The amount to be returned is taken from your bank account on your next pay date. Payday loans are up to 2000$ FLEXIBLE LOANS Flexible loan is a credit based loan that is up to $ 25,000. The term for this loan is 12 months. This loan comes with a higher interest rate than long-term loans. LONG TERM LOANS As the name suggests, long-term loan extends to a longer time period. The time frame to repay the amount depends on the lender, type of loan and your intended use of the amount. It includes mortgages, student loans, start-up loans and wedding loans. It is credit based and can be given in the form of secured or unsecured loan. A secured loan requires asset that can be kept as a...
Real Estate Investment: Setting Yourself Up for the Marathon

Real Estate Investment: Setting Yourself Up for the Marathon

For many, real estate investing is a short-term game. You get in, invest, make more money, and get out—pretty much like a sprint race. However, those who are willing to ride the changing tides of the market and navigate their way through the cut-throat competition; for them, real estate investing is a more long-term opportunity. They view it as a marathon. Naturally, their gains and returns are also stronger and higher than their sprinting peers. What type of real estate investor do you aspire to be: a sprinter or a marathon-runner? The latter? Great! Of course, like every good marathon runner, we’re sure you’ll be preparing yourself in advance for the big, long race, right? If so, we believe you’ll find the following tips helpful in achieving your objectives. Integrate them into your business strategy if you haven’t already done so. Master one sector at a time Real estate investing is a diverse field with many facets. Speaking of primary categories, there are residential, commercial and industrial property investment opportunities. Dissecting each primary investment category further, there are multiple other investment opportunities. As a long-term real estate investor, your approach should be to perfect one investment category at a time. Once you’ve mastered one category, you can then move to the next. Step by step, you’ll eventually be able to build a well-rounded skill set and prime yourself with the required knowledge and experience to establish an impressive and profitable investment portfolio. Focus on building a dependable team of experts You’re committing to a long marathon, and there’s no way you can run this marathon alone. To be successful,...
Important Questions to Ask When Evaluating a Fixer Upper for Investment

Important Questions to Ask When Evaluating a Fixer Upper for Investment

To be a successful fix and flip investor, you need to have a strong eye for the right type of property. Make no mistake, there is no dearth of fixer uppers out there; every block in every neighborhood has one. However, you need to find a fixer upper that gives you the best chance to maximize your returns. How to know if the fixer upper you’re interested in fulfills this criterion? Ask yourself these three important questions. What Does The Fixer Upper Have To Offer In Terms Of Location? Location is the most important aspect of any residential property and fixer uppers are no different. A fixer upper located in a safe, clean and convenient neighborhood is likely to be more appealing to potential homebuyers than a fixer upper located in an unsafe, dirty and remote neighborhood. Make sure that the fixer upper you’re eying is located close to community amenities and in a neighborhood where crime rates are low. How Much Will It Cost To Restore The Fixer Upper? A fixer upper requiring significant restoration should be avoided, even if it’s located in an ideal neighborhood. Such types of properties carry big investment risks and often fail to provide adequate returns on investment. Survey the property you’re interested in with your contractor to determine its true cost of restoration. Research what needs to be done to bring it on par with other in-demand residential properties in the area. Check whether the investment fits your budget. Ensure it does not involve expensive repairs and remodel. Will I Be Able To Sell The Property Quickly? This is another important question...