Tag Archive for: #hard money loan

Text: "Bridge Loans VS Hard Money Loans"

Bridge Loan vs Hard Money Loan: What’s the Difference?

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Though similar, there are differences to know in a bridge loan vs hard money loan.

Some lenders will use “bridge loan” and “hard money loan” interchangeably. After all, they are similar concepts, and lingo varies from lender to lender. But it’s important to know the actual definitions so you understand these terms if a lender uses them this way.

When to Use a Bridge Loan

A bridge loan is a very short-term loan – even shorter than the typical hard money loan. It helps you bridge the space between one project and another.

Let’s say you’re just finishing up a flip. The house is on the market, buyers are showing interest, and now you’d like to get another property bought so you can jump right in to your next flip.

Typically, you use the money from selling one property to buy the next one. But if you want to get that next property started before the current one is sold? That’s where a bridge loan comes in.

A true bridge loan covers up that gap between projects. It gives you the money to close on a new property before the first one is completely sold.

A bridge loan lets you overlap from an old project to a new one.

How is a Bridge Loan Different from a Hard Money Loan?

A hard money loan is longer and broader than a bridge loan.

  • The average bridge loan lasts 30 to 45 days. Hard money loans can last up to a year or longer.
  • Bridge loans get you from one property to the next. Hard money focuses more on a single project.
  • You pay off bridge loans when your old property sells. You pay off Hard money loans when you refinance or sell the property the loan was originally for.
  • You use a bridge loan as temporary funds to close on a house. You use a hard money loan as a more general budget for a purchase. Many come with the option for escrows to fix up the property over time.

Certain lenders do pure bridge loans, while others lump it all under “hard money.” Keep in mind as you’re learning the real estate investment game that a bridge loan vs hard money loan serves different purposes.

Read the full article here.

Watch the full video here:

Text: "How a Hard Money Loan Works"

How Does A Hard Money Loan Work? 

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What do hard money lenders look at? There are two main factors you need to know.

Becoming hard money proficient will put you miles ahead as an investor.

Before you run to any lender with a deal, you’ll need to know… How does a hard money loan work? There are two key terms you’ll need to understand: loan-to-value ratio and, more importantly for fix-and-flips, after repair value.

Loan-to-Value Ratio

The first important number a lender takes into account is the cost of the property. The second is the amount of the loan. Loan-to-value ratio is the ratio of the loan and the cost.

Let’s say you have a property with a current appraisal of $200,000. Then you get a loan for $100,000. The loan is half of the value of the home, so your loan-to-value is 50%.

After Repair Value (ARV)

ARV, after repair value, is another important factor hard money lenders consider. The properties targeted by real estate investors are undervalued. They need repair-work done to be brought up to the standards of the surrounding community.

So, lenders look at not only the current value of the house, but also the future value of the house, after it’s all fixed up.

Many hard money loans are based on after repair value rather than loan-to-value. Your lender might offer you up to 75% – not of what you’re buying it for, but what you could sell it for by the end.

What Does A Hard Money Loan Using ARV Cover?

A key factor to ARV is that lenders will lend not only for the initial purchase, but for the fix-up costs too.

Many lenders will put money aside in escrows to use throughout the project to pay contractors and cover other renovation costs.

If your loan considers ARV, it’s possible for you, with ZERO money down, to:

  • Buy a property.
  • Fix it up.
  • Either sell it (fix-and-flip) or refinance it (BRRRR).

After selling or refinancing, you use that money to pay the loan back.

Hard money is designed to build value into real estate. Understanding the role of the after repair value will help you immensely in your hard money investments.

Read the full article on hard money for beginners here.

Watch the full video here:

My Credit Score...What's That About?

Money Chat: My Credit Score…What’s That About?

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Money Chat: My Credit Score…What’s That About?

When you need a loan, do you ever think, “My credit score…What’s that about?”

Well, during our next Money Chat, Mike Bonn is going to answer all of your questions. He’s also going to share insider tips on how to raise your score so you can get the best loan possible.

My Credit Score...What's That About?

Want to join Mike’s Money Chat? Then register for FREE here.

Mike will answer common questions like:

  • Is this based on my credit?
  • Will you pull my credit?
  • How can I boost my credit score? 
  • What score do I need to get the best rates?

By the end of the Money Chat, you should have a much better grasp of how your credit score impacts your loan options…and, more importantly, your cash flow and profits.

When: Thursday, September 30th, 11 AM MST

Where: Virtual nationwide.

Register for free at https://my.demio.com/ref/lw8s3Krd8n4vKXqo

Can’t make it? No problem. We run free Money Chats every week to make sure you have an opportunity to listen, learn, and ask all of your questions.

Mike and the rest of the Hard Money Mike/Cash Flow Mortgage Company team looks forward to seeing you on Thursday.

If you have any questions about our weekly Money Chats, then our team is here to answer them any time.

Happy investing!

How to Fund Your Fix and Flips in 3 Easy Steps

How to Fund Your Fix and Flips in 3 Easy Steps

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How to Fund Your Fix and Flips in 3 Easy Steps

Do you know how to fund your fix and flips?

Let’s say you come across a fixer upper and you’d like to buy it. Well, the best way to quickly purchase a value-add property before another real estate investor can is with a fix and flip loan (aka, a hard money loan).

But what do you need to do to ensure you get the best fix and flip loan?

Today, we take a look at the first 3 steps of the process. Because if you want to make the biggest profit you can on a deal, then you need to make sure you’re working with the best lender.

For you!

 

Different Lenders, Different Outcomes

Just like properties, real estate lenders come in a variety of shapes and sizes. Some lenders require extensive real estate portfolios, excellent credit scores, and a hefty down payment. These are typically the larger national companies.

On the flip side, some lenders are willing to work with newer investors who have little to no money to lower the risk. And some charge higher rates and less points, while others sneak in hidden junk fees.

It all depends on what works best for you. If you want flexibility, then you should prepare yourself to pay more for your loan.

One of the smartest and easiest ways to find the best lender is to shop around in your area. That’s right. You’ll need to pick up the phone and make some calls. But, trust us. Those calls will be worth it because you’ll end up saving yourself a lot of time, stress, and MONEY!

What Do You Bring to the Table?

If you make things easy for lenders, then you’ll have many of them competing for your business. How can you do that? Well, here are some basic, but valuable tips:

  • Maintain a high credit score
  • Complete projects on time
  • Pay lenders on time
  • Create a real estate portfolio that presents completed projects and team members (contractor, insurance agent, title company, etc.)

What Are You Looking For?

Are you okay working with a lender who requires a down payment? Or do you need to find someone who’s okay with little to no money at closing? How about experience? Low rates? Fast closings?

Understanding what you need is vital to a successful real estate deal. So, create a must-have list before you shop around. That way you’re prepared and can find the best fix and flip lender for you and your bank account.

If you complete these 3 easy steps, we can promise your hunt for the perfect lender will get your the results your hope for.

Ready to chat about your next fix and flip deal? Our team is here and ready to help you find the right loan for you!

Happy investing!

NEIGHBOR OPPORTUNITY – NEW INVESTORS

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Don’t miss out on opportunities in your own neighborhood; like this deal purchased with Hard Money Mike financing in Colorado.

You can get set up to get the money quickly for your short- term loan with Hard Money Mike so you won’t miss out on those “gems” in your own neighborhood.

Hard Money Mike is a lender based in Colorado, lending money on all types of commercial based properties: fix and flip, land, whole tailing, and builder bridge loans.

Investor Real Estate Loans funds investor loans in single family and commercial buildings.

Hard Money Mike 303-539-3000

Wisdom Wednesday!

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