ASAP Hard Money
where time really is money

What is a Hard Money Loan?

Below are a few examples with explanations of how Hard Money loans work.

You are a contractor who builds custom homes. You have an opportunity to make several hundred thousand dollars on a piece of property that just became available, if only you could come up with $50,000 by next week, or you will lose this opportunity to someone else.

A conventional loans is out of the question, due to time restrictions and endless paperwork and delays. What you need is a "Hard Money Loan". This type of loan will lend you the money you need based on the equity you may have built up in your home, vacant lot, or other real estate. Lenders will often give up to a 65% loan to value. This means that if you have a $500,000 piece of property, and only owe $100,000, you can borrow up to 65% of the remaining $400,000 or about $260,000. It's that simple! With a hard money loan, you can use the equity in your property to secure an interest-only loan. Interest rates are between 10-12% with loan origination fees at about 4 to 6 points. With this loan, you will avoid the traditional lending process and save priceless time. In most cases, we are able to close loans in 5-7 days, and can generally fund loans in 24hrs, depending on the title and escrow companies that we are working with.

Hard Money loans are available because we have a large pool of private investores who have decided to place a portion of their financial portfolio into these 1st deed trust loans. When we receive information on a new loan taht meets our investor's criteria, they are offered the opportunity to be names as beneficiary on this loans note and deed, until the loan is paid back. In exchange, you are provided with your funds you need.

So, does the opportunities of a Hard Money loan sound appealing? Many developers, investors, etc., use these loans because of their ease and speed. With the Hard Money process, the decision to approve a lons is 90% based on the value of your property on the open market at the present time and the equity you have built in this property. Loans can even be structured to release funds as the value is being created. For example, you own a piece of property worth $100,000, an you want to borrow $400,000 to build on it. We can structure a loan that protects our investors and saves you money. We can commit to lending a full $400,000, but fund un stages. We can start with funding a $100,000, by the time that money is used up in construction on the property the value of your proerty has increased. Then, we will fund the next portion, maybe $200,000, then, when that part is done we will fund the final $100,000 as needed. The best part is that eve though we have committed to the entire loan, the borrower only pays interest on the funds that have been received at that point.

Another scenario; a new home just came on the market that you just can not pass up, but you have not sold the home you are in for one reason or another. You need money now or you will lose this fantastic place. This loan need is sometimes referred to as a bridge loan. For example; I have to opportunity to buy a really great beach house, if I can come up with the cash. I can get a bridge loan on the equity in my current house, to get immediate funds for this beach house. Then, when I have sold my house or other proerty, I can repay my loan, and enjoy the beautiful house on the beach. This loan will help you  to bridge a move form one property to another.

Cross Collateralization: This is a process used when there is not enough equity in one property to meet the LTV (loan to value ratio). Let's say, I found a property for sale that I knew was a great deal. The price is $500,000. But I only have $75,000 cash and no time for the conventional red tape. We would loan up to 65% of the market value, which in most cases is the same as a sale price. The sale price of $500,000 multiplied by LTV of 65% means we would loan $325,000 towards the purchase, plus the $75,000 cash is a total of $400,000. I'm still a $100,000 short of the purchase, but I own another piece of property with a market value of $250,000. We can cross the equity from that property, by securing our Deed of trust of $325,000 to the crossed property as additional security for the loan. If desired a release clause can be provided to free up the property if it was to be sold. A portion of hte proceeds could be used to pay down principle on the loand of $325,000. Simple put, leveraging equity in another property to provide on a loan.

NO PREPAYMENT PENALTIES.