Posts Tagged: Hard Money Tips | Leave a comment

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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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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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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The short answer is that you shouldn’t use private money when it doesn’t make sense, although that answer doesn’t really tell the whole story. To expand on that, there are various ways to figure out if private money will help or not. First, you need to run the numbers. This will tell you without any emotion whether it will make sense or not (and this applies to most financial transactions). If you are buying a property to rehab and flip, you have to know within a good degree of accuracy how much the entire project will cost and how much you can sell the property…
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