Comments on: Hard Money Lending Less Risky Than Owning Real Estate?

By: Gym Floor Refinishing

Gym Floor Refinishing — Fri, 27 Jan 2012 12:54:00 +0000

Nice share and I am do agree with you. If you are one of the many of us looking for a reliable and expeditious way to meet a substantial financial need, going to hard money lender is one of the best option you have on hands.

By: jp moses

jp moses — Tue, 08 Feb 2011 01:26:00 +0000

You’d either:

1) Get an investment property loan (720 credit score a minimum)
2) Get the owner to finance it (possible with the right circumstances and motivation)
3) Do a lease purchase or lease option (basically rent-to-own)

That’s about your options. Make sense?

…jp

By: Kurtis

Kurtis — Tue, 08 Feb 2011 00:24:00 +0000

Thank you for the reply. Okay so if I did want to keep a property to rent out for a steady monthly income, what would be the best approach?

By: jp moses

jp moses — Mon, 07 Feb 2011 23:38:00 +0000

Hi, Kurtis. Yes, hard money is a short term financing solution. It’s intended to be replaced quickly – within a matter of months. So it’s ideal for houses you’re going to resell as soon as possible. It would not work for long term keepers, like rentals.

My best,
…jp

By: Kurtis

Kurtis — Mon, 07 Feb 2011 22:51:00 +0000

I am new to real estate investing and I’m trying to fully understand how hard money loans work with the real estate investor. Since the loan is usually short term, does this mean in order for the real estate investor to pay back the loan and make a profit he would HAVE to sell the house to get the full value for the house back, not being about to rent it out monthly?

By: A. Kumar Mangalick

A. Kumar Mangalick — Wed, 19 May 2010 08:00:01 +0000

I think some of the points made in this post are being missed in the comments. Low LTV (60% or less) and short terms (1 to 2 years) will significantly reduce the risk of complete loss of capital. Another way to reduce risk is to employ a reputable underwriter, who will perform the due diligence and present only the investments which meet the lender's investment parameters.

By: jp moses

jp moses — Wed, 31 Mar 2010 07:38:12 +0000

I see where you're coming from, Tyler. But also Dyches actually put the article out just recently, preceding his workshop on how to become a hard money lender. Yes, many got burned bad in the last few years…but not all of them. There are still some doing business, and they're more in demand now than ever.

Thanks for commenting,

…jp

By: Tyler

Tyler — Wed, 31 Mar 2010 04:07:16 +0000

In all fairness to Dyches, I will assume that this is more of a generalized article (with good information) and not really meant for today's market. Hard money lenders are taking hits left and right (just as the borrower is) and by no means navigating the waters casually. Anyone can look around and compare how many Hard Money Lenders actually exist in their individual real estate markets today versus 3-4 years ago.

There are pro's and con's to being a hard money lender versus the wholesaler/flipper/rehabber in both up, sideways, and in down markets. It's just another tool a real estate investor can implement to create wealth with real estate.

By: If You Want Less Risks, Be A Hard Money Lender! | REI News Watch

If You Want Less Risks, Be A Hard Money Lender! | REI News Watch — Mon, 22 Feb 2010 04:55:48 +0000

[...] If You Want Less Risks, Be A Hard Money Lender! [...]

By: Property Investing

Property Investing — Fri, 19 Feb 2010 20:53:59 +0000

Given the economic downturn, I'd say that both are risky. However, what makes the big difference is having the right, reputable people that will lead you to the right direction.