When you flip a home or you develop and build a new house, you can accelerate your project by taking out a loan from a hard money lender. This is different from a mortgage because it doesn’t last for more than a year or 18 months, and it can include the costs of building and renovation as well as the price of the property or land. To get started, you will need to find the best hard money lender near you.
There are several criteria you might use to select someone. They include the experience of the lender, whether they offer the right products for your needs, and what other people are saying about them. However, the best way to find out more is almost always to speak to the lender directly. During the initial consultation, you can find out more about hard money loans, and you can determine whether they are right for your situation.
How to Find the Best Hard Money Lender Near You
Short-term property investors, such as developers or people doing a fix and flip, shouldn’t use traditional banks because their mortgages are often unsuitable for these kinds of projects. Hard money loans are targeted at real estate projects that take between six and 18 months, and seasoned investors or people with a good financial background won’t have any trouble qualifying.
In fact, there might be several hard money lenders to choose from, especially if you live near a large city. To find the best lending company for your situation, you’ll need to do a lot of research. You can begin by finding out as much as possible online and asking local money lenders targeted questions about their products. If necessary, you can also speak to previous or current customers to see whether the lender is offering a good service.
Know What You Need
Before you can start searching for the best lender, you need to know exactly how much money you have and how much you still need. The application process will be much easier if you go through your financial situation ahead of time. Do you already have some debt? Do you have assets you could use to pay for part of the project? And how much is your investment likely to cost?
If you can answer all of these questions, you’ll have an easier time finding the best lender because you’ll know what you need. For example, we at Turning Point Lending provide loans for people building or flipping one to four-family homes, and we can offer developers up to $2 million. You can reach out to us if you believe that the kinds of loans we provide could suit you well.
Check the Options Online
The best lending companies are active online, and they might have several informative articles on their website. These resources, and the appearance of the site, can help you determine whether the lenders will provide you with a high level of customer service. If the website is cluttered, slow, and hard to navigate, it’s unlikely that you will have a good experience because lenders might not prioritize making life easy for you.
On the other hand, a firm that provides a lot of details online and has made an effort to create a user-friendly website could be a good choice. The best hard money lenders explain clearly what kinds of products they offer and who can benefit from their loans. That way, you don’t have to waste time contacting someone who can’t help you or worrying about bad communication.
Consider the Background of the Lenders
Even if a lender has a good educational background and is excellent at the theoretical aspects of lending money, they might not be ideal for you. Always check the biography of the people you will be working with to make sure they have practical experience in your field. For example, we at Turning Point Lending have four years of funding experience, but before we became lenders, we fixed up and flipped houses ourselves.
In fact, our team has 15 years of property rehab experience and 35 years of valuation expertise. With our diverse range of skills, we will understand your needs, whether you are a developer or an individual flipping houses for a profit.
Check the Reviews and Testimonials
Checking what other people said about a particular lender is always a good idea because it can help you avoid companies that don’t provide a good service. You can start by googling the company and reading what others have to say about them. If most people agree that the lenders are reputable, you’re unlikely to run into any trouble when using them.
People who are thinking of taking out a large sum of money or those who are worried about trusting someone they’re not familiar with can contact the lenders and ask them for a reference, for example from a past customer. That way, borrowers can find out what the lending company is like in more detail.
Speak to the Lenders Directly
You can learn a lot from a website and online reviews, but before you jump in, it’s always best to speak to the lenders directly. During the initial consultation, they can answer all your questions about the interest rate, the loan term, any additional charges, the lending process, and more.
Additionally, you can get a better feel for how professional the lenders are and how much experience they have. The best way to get in touch is to call, but you can also send a message asking them to get back to you.
Do I Need a Hard Money Loan?
Fix and flip investors and property developers almost always need a loan because buying or creating a home can be extremely expensive. Aside from purchasing the property or land, you’ll have to pay for all new materials, fixtures, and decorations. For this reason, many people don’t have the means to fund such a project on their own.
Even if you have a lot of capital, it’s better to use a loan because this means that you can spread out your investment and complete several projects at once. Your profits will go up because you’ll be able to sell homes at a faster pace.
Do I Qualify?
Most people qualify for a small hard money loan, but if you’d like us to fund a large project, such as the building of a new four-family home, we will have to vet you carefully to make sure you’ll be able to complete the project and pay us back. The people who are most likely to get a big loan are those with a track record of good investments and financial decisions. However, anyone might be considered, even beginners, as long as they have a solid plan.
Some of the things we will look at to determine your interest rate include your credit score, your history with debt, and the nature of the project. If your credit score is low or you aren’t happy with your quoted interest rate, you can speak to us, and we can give you advice about how to improve your credit.
Finding the best hard money lender doesn’t have to be challenging. You can use all the information on potential companies’ websites as well as online reviews to find out more. Then, you can get in touch with suitable lenders and ask them questions directly. Call us today at Turning Point Lending to book an appointment with one of our experts. We can show you our fix and flip or new construction loan options and help you figure out whether you qualify.