How to Communicate With Hard Money Lenders


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Hard money lenders for real estates. The best way to find money for your real estate projects.

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How to Communicate With Hard Money Lenders

  1. 1. ==== ====Check out the link below for more resources: ====For borrowers and mortgage brokers, the chances of needing to deal with private lenders (hardmoney lenders) at some point during your search for a loan are becoming greater by the day.Unfortunately, outside of real estate professionals that deal with hard money lenders on a regularbasis, very few individuals are skilled at communicating and selling these lenders on their credit-worthiness. The result is a bag of mixed responses from private lenders and a lot of frustration onthe part of both mortgage brokers and their clients.So why is it so difficult to communicate with hard money lenders? Theyre a tricky bunch becausealmost none of them are the same. What works for one lender wont necessarily work for another,and they interpret information in a myriad of different ways. Going around in circles with privatelenders can make your head spin and eventually make you think that getting approved for a hardmoney loan is more difficult than finding a needle in a haystack. But what if you could greatlyincrease the odds that your loan request will not only get a favorable look from almost all hardmoney lenders but also increase your overall odds of getting an approval?Theres a phrase that floats around the private lending arena: "character counts." The reference isto the character of a borrower, of course, but what constitutes character is defined a number ofdifferent ways. For some lenders it means knowledge and experience. Does the borrower seem tohave the know-how to move their project to fruition? For other lenders it means mortgage history.Has the borrower ever chosen to walk away from a loan? And for others it almost literally meanscharacter. Does the borrower seem to be upstanding, moral and willing to accept responsibility?We cant discern what character is going to mean to every lender, and we cant change who theborrower is. However, theres an aspect to the term "character" that seems to be nearly universalin the world of hard money loans that you absolutely can control. You have the power to determinehow private lenders are going to perceive you or your borrower, whether they consider you to be"a hassle to deal with," or if your files come across with promise and potential. The trick is to knowhow to communicate with private lenders, and while some of these tips may seem trivial, notaccounting for them can be the difference between an approval and a rejection.1. Be Clear With Your InformationMost private lenders are going to require some sort of executive summary from you, which meansthat youre going to have to do some amount of explaining as to why you or your client deserves aloan and how the loan structure will provide a win-win scenario for borrower and lender. Notproviding information thats clear and concise can be an absolute deal breaker, especially whenthe deal is more complicated, as many commercial scenarios are. Information that isnt specific, isambiguous, or is directly in conflict with other information that youre presenting causes a lender tohave to ask questions (assuming they dont just turn you down). When a lender has to ask
  2. 2. questions to decipher your information it takes up their time. The more time they have to take justto understand your information the less time they have for everything else. The less time theyhave for everything else the less productive they are. So the result is that theyre more likely tobrush over your loan request or just reject it all together, assuming that it probably wasnt worththeir time in the first place.2. Check Your FactsNo matter how busy you are, you have to find time to completely understand the loan request thatyoure submitting to a hard money lender. If your file gets reviewed and youre asked follow upquestions youre going to be expected to know the answer to anything basic. If you dont know theanswer already your credibility is going to take a hit. The lender is either going to perceive you tobe a "paper pusher" or a disinterested participant. You may not have any real motivation to seethe deal through other than for the prospect of a commission. The result will be a whimsicalsecond look at your information that will probably result in a rejection. After all, why should thelender spend their time if it clearly wasnt worth yours? Lenders accept files from brokers becausethey provide a valuable service: an initial screening of borrowers files that categorizes them aseither having potential to be funded or not worth the time. Make sure that you dont forget to doyour job, because nobody is going to do it for you in this market.3. Package and LabelTheres a big difference between handing someone a stack of papers and asking them to readthrough it and handing them a tightly bound file with labeled tabs that allow them to easily accessthe information that theyre interested in. If you tend to do the former, youre greatly decreasingyour chances of success with private lenders. Nobody wants to sort through information, they wantto have it presented to them. Consistently packaging and labeling your information in aprofessional manner goes a long way in determining how you, your borrower and your loanrequest are received.4. Dont Info DumpPrivate lenders arent banks, so the information that they require you to submit is going to changefrom firm to firm. While many basic items may be similar, every lender will have a different flavorthat they like. If you simply fire around the same information to a list of private lenders, most ofthem will receive it and immediately think that you didnt both to take the time to look at their loansubmission criteria. Theyll wonder if youre lazy, if youre throwing things around hoping that theyllstick somewhere, or if you just werent intelligent enough to understand what information it wasthat they typically request. Whats worse is that all of that unnecessary or improperly presentedinformation will just get in the way of the good information and it will take a lot longer for the lenderto get through it, again taking more of their time. If their review team isnt in a good mood that daythey may never even get to the good information and youll receive a rejection before your loanrequest ever had a chance.5. For Goodness Sake, Type ItDeals are overlooked, passed on, put on the bottom of the pile and rejected by private lendersevery day simply because they dont want to bother to try to read borrowers or brokers
  3. 3. handwriting. Were in the year 2011 and Americans are starting to talk about living on Mars by theyear 2030 - its about time to learn how to type and use the computer. Not all mortgage technologyis necessary, but simple word processing is. If you provide handwritten information to a privatelender its very likely that theyre not going to take you seriously. Its a harsh reality, but its time tomake the change if you havent already.Doing the little things doesnt ever increase the quality of your loan request, but it improves alenders perception of you. When they feel like youre worth their time youre not only more likely toget the attention that you deserve, but youre also more likely to have lenders help you findsolutions. When hard money lenders consider you to be a straightforward, reasonable, organizedand trustworthy person theyll do their best to find a way to get you funded (assuming there isone). Becoming one of the best at communicating with hard money lenders can literally transformyour ability to get loans funded. Take the time, do the work, and the results will come.Chris Gleason is the Managing Director of MMG Capital, a nationwide hard money lender. MMGCapital and its partners have over 50 years of combined real estate, finance, and lendingexperience and handle all of their transactions with utmost integrity and complete transparency.More information about MMG Capital can be found on our website:http://mmgcapital.wordpress.comArticle Source: ====Check out the link below for more resources: ====