Finding the best hard money lender for you can be difficult if you don’t know where to look. Keep reading and learn more.

Everyone agrees; investing in real estate is a lifetime investment with enticing returns. However, hitting the ground running in real estate is no child’s play. But do you know working with the best hard money lender can fund your real estate project?

You already know getting funding for some real estate projects can be hectic, right? If you are looking for flexible and short-term real estate investment funding, tap yourself on the back. A hard money loan is what you’ve been looking for.

Hard money loans are secured against a property and have few requirements to qualify. These financing tools are more popular with real estate investors, and individuals or companies can issue them. But all hard money lenders are not the same; you must hit the nail on the head.

Finding a reputable hard money lender can be a daunting task with all the options available. To make the process straightforward, you need to be informed first. But don’t worry about that; you are in the right place.

Read more to learn about the benefits of working with hard money lenders and how to choose the best.

Reasons to Work With a Hard Money Lender

Getting funding from conventional financial institutions can be challenging, mostly in real estate.

To give investors the required capital, hard money lenders provide flexible loans to fund different types of projects. But should you opt for hard money lenders when seeking funding for your real estate project?

Here are some of the key benefits of a hard money loan.

Few Requirements

Contrary to conventional banks with a strict lending criterion, hard money lenders have fewer conditions to be met. They require fewer personal documents to approve a loan, and they are flexible too.

Do you know the hard money lender is only interested in the value of the property? They don’t care about your credit history or personal income sources. With fewer requirements, the chances of being approved for a loan by a hard money lender increase.

However, while chances of getting the loan are high, you are not guaranteed. These lenders will calculate the risk, and they might turn down your loan request for several reasons. But if you meet the few requirements, you can get approved for the loan within a week.

Versatility and Flexibility

Are you worried that your bank might turn down your request for a loan since it’s not in their catalog? If so, find the best hard money lender to work with. These lenders are flexible when it comes to financing projects.

It will be much easier for you to get funding with these private lenders for projects that can’t be financed in other financial institutions. They finance projects, including purchasing or construction of residential and commercial properties.

Banks are strict and don’t offer loans that are not on their lending criteria. In such cases, the hard money loan saves the day. You can get a quick fix and flip loan, which is almost impossible to get in a traditional bank.

Best Hard Money Lenders Measure Against Future Value

Most conventional banks check on the property’s standing value before issuing a loan. With a hard money lender, it’s a whole different case.

The private lenders assess the future value of the property thus can lend for both purchase and construction at the same time. This will reduce the struggle and make the experience much more convenient for you.

Speed

Do you know you can get a hard money loan in a day? One of the key reasons to work with hard money lenders is the speed at which they approve loans. Meeting their few requirements only means you get approved for the loan immediately.

After loan approval, getting cash in your account can take about 3-5 days, unlike 30 days with traditional banks. If you are in need of investment funding, but your bank can’t deliver, or they have pulled out, find a reputable hard money lender.

How to Find the Best Hard Money Lenders

To enjoy all these benefits, you must choose the right hard money lender. Working with a rogue lender can cause you problems with exorbitant interest rates and exploitive loan terms. For the best experience, it’s vital to find a reputable lender who has issued hard money loans for years.

Here are some crucial tips to consider to help you make the right choice when picking a hard money lender.

Do Your Homework

To get started, do your research and find several options for potential private lenders. Your professional and social circles can be handy in offering these recommendations.

Ask your friends, colleagues, or family members who have used this financing before or those working in the real estate industry. Check if they know a reputable lender, they can recommend you to and get their contacts. Inquire about the experience of working with the lender and if they can advise you to work with them.

Do an online search if you don’t know anyone who has worked with this lender in your circle. A quick search on hard money lenders in your area will bring multiple options for you to consider. You can check through them to pick at least five.

Reputation of the Lenders

You are not yet to contact them without knowing what it’s really like to work with them. What are other borrowers saying about them? It’s important to get crucial insights about working with every lender on your list to avoid falling into a trap.

Ensure to read reviews and testimonials online about them. Every business is likely to have positive and negative reviews from past clients, depending on their experience. However, the negative reviews should not be significant.

Keep in mind the criticism or praise you get reading the testimonials reflect the actual experience with the lender. Multiple poor reviews are a red flag, and you ought to avoid such lenders at all costs.

Also, to avoid falling victim to loan fraud and scams, it’s key to check on the potential lender’s physical office. While the loan request and approval might happen online, know where to find a lender if you need to.

Check out online platforms such as Better Business Bureau and Yelp to evaluate their rating and if they have complaints. Also, do they belong to any industry association such as the American Association of Private Lenders?

Licenses

In most states, private lenders are required to have a license before they start issuing loans. You need to know the specific license requirements in your state by contacting the banking and insurance agency. Armed with this information, check if the lenders have met all the requisites to give out loans in your area.

If a lender doesn’t have a license on their website or their customer support is taking you rounds when you call to inquire, it’s another red light. A reputable lender will display all the necessary documents on their website. Also, they can easily provide proof of licensing when you contact them.

Check on the Speed of Funds Availability

You want to borrow from hard money lenders due to their quick service, right? Before choosing one, make sure you can get the amount you need in the least time possible. You don’t want a lender who will approve you for the loan then takes weeks before availing of the cash.

But how exactly can you determine if the lender has ready funds when it’s all rosy on their adverts? Reading testimonials and feedback can also help with this. Check how long it took previous borrowers to get the funds and if anyone complains about it.

When reading testimonials, consider using third-party websites to avoid biased or edited feedback. Also, you can request to contact some of their previous clients to get the info right from the horse’s mouth.

Interest Rates and Service Fees

As an investor, you want to maximize profits in your venture, right? Well, one of the ways to achieve this is getting funding with competitive interest rates and low loan fees.

Check on the interest charges and service fees of the lenders on your list. You don’t want to choose the cheapest option; cheap is expensive. You might get the cheapest rates from a lender, but they take long before disbursing the approved loan.

Compare the different lenders while comparing their rates. After calculating all the costs and expenses of the investment, including loan fees and interest rates, the net profit should be reasonable. Also, don’t forget to read the terms of the loan to details such as the repayment period.

Look for a Hard Money Lender Today

Hard money loans are a viable source of funding for real estate investment projects. However, keep in mind not every hard money lender is perfect for you. You must find a reputable lender who suits your investment needs.

With the above tips, finding the best hard money lender becomes a plain-sailing task.

Are you looking for a hard money lender? At Orchard Funding, we are here to help. We are a private hard money lender providing bridge financing, fix and flip and ground-up construction loans for real estate investors.

Contact us today for all your hard money loans needs.