Posts Categorized: Hard Money Tips

Now Is The Time To Buy A Home!

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buy a home at low prices using hard money loan

This is a line many real estate agents and loan officers have used to try to get prospects to buy a home. Sometimes it was true, sometimes not. So why am I saying it is true now? According to the California Association of Realtors , in the 2nd quarter of 2006, only 26% of Californians could afford an entry level home. As prices dropped, the number of people who could afford to buy a home increased. Now, with prices as low as they are, home affordability is at the highest point in many years. In fact, in Sonoma County, with the median home price at $274,860…
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Hard Money/Private Money Rates

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private loans interest rates

Probably the most asked question when someone is calling to find out about hard money is, “What is the interest rate?” The short answer, which is also not very specific, is that rates usually range from 10 – 12%. In some cases, we have done deals with rates below 10% but those tend to be cleaner deals. Before we can accurately answer the question, we need to know some of the details of the loan. Some of these things are: loan amount, purchase price (if it’s a purchase), property value, what type of property and the location of the property. There are other factors that…
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Why Buy a Rental Property?

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rental property

During housing boom a few years ago, many people bought rental properties because they thought the value would increase and they would end up making money when they sold the property. This was common practice even when there was a negative monthly cash flow, sometimes several hundred dollars. Then, when the market crashed, many people lost those homes and decided never to buy a rental again. Now that prices have come down to a more reasonable range, there are many areas where the rents will more than cover the mortgage payment, including property taxes and insurance. With positive monthly cash flow now a very real…
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38% of Homes Bought in 2011 Were Bought With Cash

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private loans interest rates

In a study performed by Hanley Wood Market Intelligence, it was found that 38% of the homes purchased in 2011 were bought with all cash. This is slightly higher than 2010, during which 34% of all homes purchased were bought with cash. By comparison, only 19% of the homes purchased in 2006 were paid for with cash. There is a lot of speculation on the reason for the high percentage of all-cash purchases but one could easily arrive at the conclusion that much of the cause lies in the tight lending guidelines being used by the banks. It could also be caused by the volume…
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Why Buy During the Winter?

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private loans interest rates

Many people do not shop for houses during the winter because they have other things to do or because they don’t want to deal with bad weather while looking at houses. While this is understandable, it may cost you money if you fall into this category. Why? As we all know, prices are determined by the market. When there are more buyers, prices will tend to be higher. Conversely, when there are less buyers, prices tend to be lower. If you think about it, it makes sense that if no one else is competing with you for a house, you are more likely to get…
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Were You Improperly Harmed by a Foreclosure?

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private loans interest rates

There was an interesting article last week in the Santa Rosa Press Democrat that described actions that can be taken if you were harmed by an improperly handled foreclosure. If you qualify, you can request an independent foreclosure review. If the review finds that you were financially injured due to errors, misrepresentations or other deficiencies in the loan servicer’s procedures, you may entitled to receive compensation. There are specific requirements that must be met in order to be eligible so not everyone who lost a home in foreclosure will qualify. For starters, the loan servicer who handled it must be one specifically named on the…
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Loans for Foreign Nationals?

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private loans interest rates

We have been asked several times recently if we could do loans for foreign nationals. For some reason, this seems to be a hot topic. It is probably due to the lack of financing available for deals that fall outside the box that the bank loans must fit into. Combine that with the fact that there are a lot of people who have money and want to invest in real estate when it is at or near the bottom of the market and you have a need for things like this. Now to answer the question, yes, we can do loans for foreign nationals as…
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The Flexibility of Private Money

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private loans interest rates

Since most people are accustomed to conventional lending, they are surprised when they find out how flexible we can be on our underwriting of loans. Please don’t assume that we can do anything regardless of how bad the situation is. The deal still has to make sense. But this is the thing that separates us most from conventional lenders and banks. For example, banks want proof of where your down payment is coming from and how long you have had it. They also have restrictions on gifts for down payment. In many cases, if you receive a gift, you have to prove not only that…
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What About Owner Occupied Hard Money Loans?

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private loans interest rates

One of the most frequent questions we are asked is if we will do hard money loans for owner occupied homes. We only loan on owner occupied homes if the funds are specifically intended for business purposes. This means that the loan funds are used for a business need and not for a personal, family or household use. Examples include a loan to expand your business or a loan to put a business office in your residence. If you have checked around, you have undoubtedly found that most hard money lenders will not do owner occupied loans. Why is that? Mostly, it is because the…
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Is Credit Important When Getting a Hard Money Loan?

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You might think that because hard money loans have traditionally been equity based, no one should or would care about credit. While this is true sometimes, there are instances where credit does play a part in underwriting a hard money loan. For example, if there are two borrowers applying for similar loans and one of them has good credit while the other has bad credit, it is not uncommon for the one with good credit to get a slightly better interest rate and to get approved more quickly. Really, it depends on the investor who is going to provide the money for the loan. Some…
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