5 Places To Find Hard Money Lenders In Your Market
By Paul Esajian on September 30, 2018
If you invest in real estate, or plan on investing in the near future, you need to find a reliable hard money lender. Regardless of the type of investing you are involved in a hard money lender should be a consideration. They may not be a perfect fit for every transaction, but you should always at least have that option. Hard money lenders have grown exponentially in recent years. With traditional investment loan guidelines still difficult there are many instances where hard money is the best alternative. Not only can you close quicker but you won’t have to worry about lender red tape holding up a deal for weeks. Here are five outlets to help you find a hard money lender in your area.
- Real estate agent. A quality real estate agent does many things to help facilitate a transaction. In addition to the obvious real estate related responsibilities they also know many key people in your area. It is a safe bet that they have worked with, or at a minimum, know a handful of hard money lenders in your area. It is no secret that since the mortgage collapse last decade things have changed quite a bit in world of real estate. Lenders almost immediately changed the way they underwrite loans. The boom in foreclosures and short sales led lenders to look for offers with quick, reliable closings. There was a premium given to cash offers. Many real estate agents worked with hard money lenders and investors to get these types of deals closed. With years of experience, and dozens of deals under their belts your real estate agent should be able to pass off a handful of hard money lending options.
- Attorney. The same thinking with your real estate agent applies to your attorney. If you invest in real estate, it is important to use a dedicated real estate attorney. Even if they can close a transaction, it doesn’t mean their primary focus is on real estate. A real estate attorney knows how to deal with buyers, sellers, lenders and fellow attorneys to get deals closed. They can see things on title or on the contract and nip them in the bud before they turn into bigger concerns. They also have a wealth of experience and contacts they can pass along. Many hard money lenders acquire properties on their own without using a real estate agent. They enlist the services of an attorney to handle almost every aspect of the transaction. If your attorney doesn’t directly work with a hard money lender there is a good chance they know someone who does. As obvious as it sounds simply ask if they have a lender they can refer. They most likely will and will also give you some tips on working with them.
- Mortgage broker. A local mortgage broker can be a very valuable contact to have. There is a big difference in a mortgage broker and a lender who works at a local bank. The local lender only has a handful of portfolio products they can offer. A mortgage broker typically has dozens of lenders and programs they can offer to borrowers with various types of credit profiles. They are more likely to find borrowers with less than perfect credit dealing with difficult situations. An experienced mortgage broker has most likely referred a borrower to a hard money lender at some point in the past decade. Between various networking meetings and clubs, a mortgage broker probably has a handful of lending options they can pass along. If they can’t personally share a mortgage option, they should be able to provide a reliable hard money lender.
- Bandit signs. There are several ways to find hard money options independent of personal contacts. Perhaps the best way is by reaching out to bandit signs you see in the area. Bandit signs are the signs you typically see in front yards promoting a political candidate or on telephone poles in busy intersections. You have probably driven by them many times without giving them much thought. For real estate purposes they can be a useful way to grow your network. Make note of any “we buy houses” or “quick, cash closing” bandit signs you see in your area. Reach out to the number listed and explain your situation. Tell them you are a local real estate investor who has access to deals from time to time but is having trouble finding capital to close them. That should be enough to prompt a meeting and go from there. There are probably a handful or more bandit signs you can call just on a weekend drive around town.
- Newspaper. It is funny to think that only a decade ago the classified section was a prime real estate resource. Not only would you use the newspaper to find tenants, but you could use it to find foreclosure listings and fellow investors in your area. While times have changed, some things remain the same. You can still use the newspaper to find hard money. There are many hard lenders who will promote their services in the classified section of the paper. Some may come right out and promote money to lend while others use phrases similar to what you would see on bandit signs. It is important to remember that they are looking for you just as much as you are hoping to work with them.
If you invest in real estate long enough eventually you will come across a situation that needs hard money. Take steps today to ensure you have someone you can call.