Most real estate investors prefer Hard Money loans when securing funds for a new venture or project. There are many reasons for this preference, but it mostly comes down to the ease of use and the speed at which they can procure these loans.
When you’re looking for a hard money loan, there are certain universal rules to keep in mind, but there are also some specific points to think about, depending on your area. If you’re looking for a Hard Money Lender in Washington D.C., then you’re going to want specific advice about the D.C. area.
We talked with Hard Money Bankers, one of the most trusted and veteran hard money lenders in the U.S. We asked them how to choose a Hard Money Lender in Washington D.C., and now we’re going to share some of their key points.
Hard Focus on Hard Money
Hard money loans are not the same as private loans. Many companies offer private loans, which are similar to hard money loans but not the same. Hard money loans have very specific structures, and a lot of nuance goes into their creation.
This means you need to find a company that deals with hard money loans; otherwise, you may end up getting a poorly facilitated private loan, fronting as hard money.
Go Local
Not only should you find someone specializing in hard money, but you also need to find someone specializing in Hard Money in Washington D.C. Finding a Hard Money Lender in Washington D.C is not very hard; in fact, it is easy.
A lot of competition is great because you can shop around for the best rates. Staying local also means your hard money lender will be familiar with local real estate. They will be able to give a proper inspection much faster and much easier than a non-local lender that isn’t familiar with the D.C. area.
Transparency
Hard Money Bankers really emphasized the importance of Transparency when making deals with hard money lenders. All lending avenues have their bad actors, and hard money loans are no different.
There may be lenders that advertise a certain rate just to raise it later in the contract. They may try to coerce you into a quick sign by offering a limited-time deal.
Legitimate lenders won’t rush you, and they will give you all of the time you need to understand a contract. They know the deal is fair, so they are not worried about you thoroughly checking it.
Know what you Need
Knowing exactly what you plan to do with the loan will make choosing a Hard Money Lender in Washington D.C. much easier. Know whether you want to flip a house or group of houses that you got for cheap, or if you’re going to fix a property up before selling it.
Know how much money you plan to invest in the property and how much you plan to sell it for. Having all of this information to present will make getting a good loan much easier.
Brokers
Make sure that you understand whether your hard money lender is the lender or the broker. Think of the broker as a middle man, they don’t actually manage your loan, but they broker the deal between you and the lender.
There’s nothing wrong with a broker, but you need to know exactly what is happening with your loan.