Are you a real estate investor applying for a hard money loan for the first time? Ace your loan application with these three useful tips…
Hard money loans are convenient solutions for financing real estate investment ventures. Many real estate investors use hard money loans to buy, develop and remodel real estate properties.
The requirements for a hard money loan are quite relaxed. Unlike bank loans, where you strictly need to have a good credit score to get approved for a loan, hard money loans can be secured even with bad or no credit history.
That doesn’t mean, however, hard money loan applications don’t get rejected.
To qualify for a hard money loan, you must have a property to submit as collateral. Applications without collateral are rejected outright.
Additionally, you need to provide a few other things to your hard money lender to convince them to sanction a loan for your investment.
These things include:
An exit strategy tells the lender how you intend to ultimately pay off the loan.
It’s important to have multiple exit strategies in place so that if one strategy fails, you can always fall back to the other.
A strong exit strategy can give a massive boost to your hard money loan application.
Before putting their money into your project, a hard money lender would want to know what your game plan is.
For instance, if you’re buying a raw piece of land and plan to build a multifamily property on it, you should have quotes from the contractors specifying the costs to be incurred in the development. Also, you should have a tentative timeline for the project, if not a definite one.
By laying out the details of your real estate project, you can improve your chances of qualifying for a hard money loan.
While a portfolio is nota “requirement” for qualifying for a hard money loan, and you can get a loan even if you have no previous experience of investing in real estate, having a portfolio does help make your case stronger.
Your portfolio communicates your expertise in the field. It tells the lender about the types of ventures you’ve worked on and how suitable you are to undertake the project.
A good portfolio can convince your hard money lender to sanction the loan for your investment.
This brings us to the end of the article. We hope you found it informative and helpful. The team at GCP Fund would like to wish you all the best with your real estate investment project!
About GCP Fund
GCP Fund is a leading national commercial lender serving in Baltimore MD, Frederick MD, and Annapolis MD. The company provides different loan solutions to real estate investors and businesses for their various investment and capital needs. For more details, call 1-800-514-7350 or email at email@example.com.