Hard money loans are a great option for real estate investors, property flippers, or contractors. The speed, security, and ease of approval are just some of the attractive benefits of hard money loans, but they’re not for everyone. While hard money lenders are unlike banks in many ways, there are some documents and assets you will still need in order to get approved. Here’s what you’ll need to get started in the process of getting a hard money loan.
A down payment is required for almost every type of loan, with the exception of government-backed loans. You will need a certain percentage of the purchase price in order to begin the process. This amount depends on the lender’s terms and the purchase price. At Precision Capital, we will cover up to 90% of the purchase price. That means if you want to buy a property for $250,000, your down payment will be as little as $25,000. The way we determine the size of your down payment is through looking at the current or “as-is” value, the future or “after-repaired” value, and the purchase price.
While you don’t need perfect credit to get a hard money loan, you do need to have some financial strength. This means you may have to prove that you can pay the monthly payments and the down payment. Sometimes, the equity or strength of the project can carry the payments, but solid start-up capital certainly gives you a leg-up on getting approved. You will also need to be able to cover any origination fees or other fees tacked onto the loan. The more you have saved, the more likely you are to get approved for a hard money loan.
Whether it’s your own experience or the experience of those you’re working with, experience matters when getting a hard money loan. Experience in your desired field shows you are trusted and reliable. Precision Capital is a non-traditional lender who specializes in unique situations and creative solutions, so even if you’re just starting out but have an experienced contractor by your side, you can still get approved.
Now all you have to do is apply! Hard money loans are helpful, quick fixes for a variety of problems. They require much less time and energy than a traditional loan, and are more easily approved. A hard money loan may not be the best solution for everyone, but it might be right for you. Being a short-term solution to your long-term goals is Precision Capital’s mission. Whether you’re a property developer or a house flipper, we’ve got a loan solution for you. Contact us today for your loan estimate.