[toggle Title=”Why use a hard money lender, why not go to a bank?”]Banks and Conventional Lenders do not lend to individuals to rehab investment properties. You can get a 203K or construction to permanent loan, but theses are for owner occupied properties only.[/toggle]
[toggle Title=”Where do you lend?”]The Hampton Roads, Virginia area. Lending areas may change, as the real estate market moves.[/toggle]
[toggle Title=”Why are hard money loans more costly than bank loans?”]The easy answer is that a bank won’t do an investment property rehab loan, so expense is not an issue. With that said, the reason Hard Money Lenders are more costly is because the loan is considered a high risk loan. A Hard Money Loan carries so many variables, most importantly, the lender is loaning you money off the future (ARV) value of the property. If you default on the loan, it is very difficult, costly and time consuming for the lender to try to recapture their principle loan amount.[/toggle]
[toggle Title=”Every company I call wants a loan application fee, due diligence fee or something I have to pay for upfront. What are your upfront fees?”]Zero, Nothing, No Gimicks, No Bait and Switch, Nothing! When we work together on a deal, it is a partnership. We don’t collect or make any money on the loan until the end. We roll our points and your six months of interest payments into the loan. We don’t make our fees until your property is sold or refinanced. The only thing you will have to pay for, before we close on the loan is an appraisal and credit check fee. Theses are both paid directly to a third party and we do not collect any of these fees.[/toggle]
[toggle Title=”How and when do I get the money to pay for the construction?”]We pay you directly out of an escrow account. We work off of a weekly draw schedule. Draw requests are required to be made by 5pm on Wednesday of each week. If a draw is submitted, the property will be inspected on Thursday and payment for work completed will be available Friday after 2pm. We only pay for work completed. We do not make advance payments or pay for materials in advance.[/toggle]
[toggle Title=”How is the value of the property determined?”]The value is determined by a third party, independent appraiser. The appraisal will do a ‘subject to’ appraisal that will generate a ARV (After Repair Value). In order to complete this, you will need to provide the appraiser with a scope of work for the property and meet the appraiser at the property the day of the appraisal.[/toggle]