Private Hard Money Lenders - The Different Lenders And How They Can Help Real Estate Investors!
==== ====Check out the link below for more resources:http://hardmoney.toufangle.com==== ====Most real estate investors rely on certain private hard money lenders for their source of funds. Butgetting the financing for various real estate investments can be extremely hard if you approach thewrong lender. This article will help you tell the difference between these lenders and help you workwith the ones that can help you...Not all hard money lenders really understand rehab and resell investment strategy being used bythousands of real estate investors all over the country. In reality, there are various levels of privatelenders:1. Commercial investment lenders2. Development lenders3. Bridge lenders4. High end home lenders5. Residential lendersBy fully understanding your business model, you will be able to work with the best hard moneylender that helps investors just like you. For me, itd be residential hard money lenders.Apart from that, these hard money lenders also differ in their source of funds. They are banklenders and private hard money lenders.Bank Lenders - These lenders get their funding from a source such as a bank or a financialinstitution. These lenders give out loans to investors and then sell the paper to a financialinstitution like the Wall Street. They use the money they get from selling the paper to give outmore loans to other investors.Since these lenders depend on an external source for funding, the Wall Street and other financialinstitutions have a set of guidelines that each property must qualify in order to be eligible for aloan. These guidelines are often unfavorable for real estate investors like us.Private hard money lenders - The model of these lenders is quite different from the bank lenders.Unlike the bank lenders, these lenders do not sell the paper to external institutions. They are abunch of investors who are looking for a high return on their investments. Their decision making isprivate and their guidelines are quite favorable to most real estate investors.But theres a huge problem with such private lenders. They do not have a set of guidelines thatthey remain consistent with. Since they remain private, they can change their rules and interestrates anytime they want. This makes such lenders highly unreliable for real estate investors.
Heres a story for you:Jerry is a real estate investor in Houston whos mainly into residential homes. His business modelconsists of rehabbing properties and reselling them for profit. He finds a property in a nice part ofthe town, puts it under contract and requests his lender for a loan.The lender has changed his rules regarding lending in that particular area of the city. Therefore, hedisapproves the loan. Jerry is left nowhere and tries to find another profitable property in adifferent area of the town the lender seemed interested in.He finds the property, puts it under contract and requests for the loan. The lender once againdenies the loan to Jerry saying that the market is under depreciation in that particular area.Poor Jerry is left nowhere to go. He has to keep altering his model and has to dance to the tune ofhis lender.This is what happens to almost 90% of real estate investors out there. The newbie investors whostart with a goal in mind end up frustrated and give up the whole real estate game.The other 10% of investors who really succeed work with the right private hard money lenders whoplay by their rules. These lenders dont change their rules often unlike the other private lenders.These lenders specifically give out loans to real estate investors that are into rehabbing andreselling properties for profits. The company usually has a strong real estate background and theytend to do their research before giving out loans.They have a set of guidelines that they strictly adhere to. They dont change the rules often like theother lenders out there. If you want to succeed with real estate investments, youll have to findsuch a lender and work with them for as long as you can.DoHardMoney is one of the hard money lenders that really understands the needs of real estateinvestors that are into fix and flip. We consistently adhere to the guidelines that we have set forth.For a private money loan for your investment, check out this page - private hard money lendersArticle Source:http://EzineArticles.com/?expert=Tyler_C_Anderson
==== ====Check out the link below for more resources:http://hardmoney.toufangle.com==== ====