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The Definitive Guide to Finding the Best Hard Money Lenders near You

When searching for a hard money loan, you want to make sure you are finding top notch service. Here’s how to find the best hard money lenders near you.

Are you looking for funds to make a real estate investment?

If yes, one of your options is to go in for a hard money loan, and for good reason. Hard money loans are secured against a real asset, meaning you don’t have to worry about your credit history. As long as you have a property to put up as collateral, you have a strong chance of getting the money quickly.

But there is one problem. There are lots of hardy money lenders around, so finding the best for your needs can be challenging.

Worry not, though. Here is a complete guide to finding the best hard money lenders near you!

Do Your Research and Draw a List of Potential Lenders

Start your search by getting recommendations from the people in your social and professional circles.

If you have a friend who is also a real estate investor or works in the real estate industry, don’t shy away from asking them whether they know any reputable lenders. If they know of a good company that does the business, they will give you the contact details.

What if your family and friends don’t know any hard money lender?

Take your search online. A quick “hard money lender near me” search will bring up results of top companies in your local area.

Draw a list of about 5 lenders.

Evaluate the Reputation of the Lenders on your List

What makes a hard money lender reputable?

Well, there are a couple of factors that go into determining the reputation of a private lending company. First, in a lending industry tainted with loan scams and fraud, you want to ensure your preferred lender has a physical office and excellent online reviews.

Use platforms such as Yelp and Better Business Bureau to evaluate whether the lenders on your list have positive reviews or ratings. If a company has no presence on these platforms or has a few poor reviews, delete them from your list.

Another way to know whether a hard money lender is reputable is to check whether they belong to an industry association, such as the American Association of Private Lenders.  AAPL holds its members to high standards of service, so by choosing a company belonging to this association, you’re assured of quality services.

Ensure the Company Is Properly Licensed and Insured

Most states require private money lenders to obtain a license to start giving out loans. Be sure to contact your state’s banking and insurance agency to know the specific licensure requirement in your state.

Armed with this information, you can check whether the lenders on your list have the proper licenses. If a company doesn’t display licensing details on their website or its representatives are being cagey with the details, that’s a red flag.

You might be wondering, “Why do I need to bother about insurance? After all, it’s lender incurring the risk, not me.”

Consider this scenario: What if the property attached to the loan as collateral gets flattened out by a natural disaster?

If you default on the loan, the lender will have nothing to seize and sell to recoup their money – save for the land on which the property stood. In situations like this, the lender’s insurance company will step in and compensate them for the loss.

It’s also important to note that most private money lenders will require you to purchase adequate insurance for the property you want to use as collateral.

Consider Speed of Funds Availability

In real estate investing, timing is crucial.

When an ideal fixer-upper enters the market, for example, you have to act quickly. If you don’t have the cash right away, other investors will snap it up.

This is why you must consider a lender’s ability to quickly avail the amount you’re borrowing. You don’t want a lender who’ll approve your application and then take days to disburse the money to your account.

But how will you find out if a lender has the funds ready?

Given that some lenders falsely advertise fast approval and disbursement but fail to live up to it, take care not to fall for plain statements. Look at testimonials on the lender’s website, and you can request to contact them and verify whether the company delivers as advertised.

Look at the Services Fees and Interest Rates

As a real estate investor, your goal is to make profitable investments.

When you finance investment with a hard money loan, you’ll have to make do with a lower profit. The loan’s fees and interest will eat into your profit margins.

To ensure you make as much money as possible from the investment, consider the fees and rates charged by the lenders on the list. Ideally, you want to choose the cheapest lender, but this should not be the primary factor. A hard money lender can offer the cheapest rates but be slow at disbursing approved loans.

Before settling on a lender, have a good understanding of the investment you want to make with the money. If you need a fix and flip loan, for instance, have an estimate of the money you’ll make after subtracting all expenses, including the loan principal, fees, and interest.

Does the net profit excite you? If yes, go for the loan. If not, it’s probably because the loan is too pricey for you. Find a cheaper one and avoid lenders asking you to pay upfront fees.

In addition to the interest rate, ensure other terms – such as repayment period – are appealing to you.

Go Find the Best Hard Money Lenders Near You!

Hard money loans are an ideal source of real estate investment capital. But not just any hard money loan is ideal for you.

It’s important to find a lender who suits your investment needs. And now that we’ve told you how to find the best hard money lenders in your area, the task should be fairly easy and straightforward.

Better yet, you don’t have to go through the hassle of searching for a lender. Just contact us at Orchard Funding and let’s talk about your funding needs.

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