Brooklyn Hard Money Lenders
Delancey Street is a top rated hard money lender with over $200 million in loans done by our team of associates. Regardless of what you need the money for, we can help you. We have experience handling residential and commercial projects of all sorts and budgets. Brooklyn Hard Money Lenders like Delancey Street are here to help you achieve your financial goals. Many real estate professionals all over the country turn to us to fund their business goals. Many entrepreneurs and investors have a hard time getting a loan from a traditional lender. Unable, or unwilling to obtain financing from a traditional source, investors turn to hard money lenders to fund their real estate deals. When you borrow from a hard money lender, you benefit by the relatively hassle-free and transparent process.
What’s a Hard Money Loan?
Real estate investors often turn to hard money lenders to get deals funded fast. In some cases, these are deals that wouldn’t qualify for a conventional loan. Typically, they are loans for investment properties and as a result the bank won’t approve it. In other cases, it could be due to the fact the borrower is over-leveraged, or has some pre-existing financial issue which will prevent approval. When time is of the essence, real estate investors have to move fast and close the deal.
Hard money lenders are private individuals or companies with the resources to fund your venture. There’s no financial institution involved in the arrangement. An example is your family member, friend, or colleague. By using hard money to finance deals, investors avoid the usual challenges that traditional lending presents. Delancey Street can help you find the funding you need to close deals quickly and become successful. We will work closely with you to ensure that you get the funding you need quickly.
Advantages of Hard Money Lenders
Here are some reasons why hard money loans can be a smart choice for real estate investors:
Fix And Flip Loans – Private loans are a great option for those who want to purchase an investment property which needs to be fixed or renovated. Banks and other conventional lenders often don’t grant loans or funding for properties that are vandalized, or seriously damaged. In other words, if you are seeking loans for fix and flip projects, you need to find a private money lender.
Credit Scores Are Not Considered – Your income history and credit scores are one of the crucial factors when processing conventional loan applications. Private money loan lenders will approve your loan application regardless of your credit score. Often, private lenders only want to ensure that the asset they are lending against can be collateralized against the loan amount.
Quick Loan Approvals – Hard money loan applications are simple and processed quickly. The documentation process is straightforward as opposed to traditional lenders who require real estate investors to fill out countless, complicated documents. Hard money lenders can provide the fund you need in less than a week.
Why You Should Choose Delancey Street
We have helped numerous real estate professionals get access to the funding they need. If you’re looking for a partner – someone who cares, and will work with you at every step of the process – speak to us. We don’t care about your credit score, income, or other irrelevant factors. The only thing we care about is your project – and how you intend on making it a success. Tell us what you need the money, demonstrate how our funding will make an impact on your business, and finally – tell us how you intend on repaying the loan. It’s really that simple.
What is the largest factor in qualifying for a hard money loan?
When you go to a traditional lender, like a bank, they care about your credit score, and your ability to repay the loan. In contrast, hard money lenders care exclusively about the value of the property. What does that mean? Hard money lenders, when giving a loan – care about what the value of the property is – relative to the loan they are offering on the property.
The largest factor in qualifying for a hard money loan
The answer is simple: the value of the property. Remember, if you don’t repay the loan – the Brooklyn hard money lender takes the property. This means the lender benefits because he/she is taking over the property, and can sell it and keep the proceeds. It’s because of this that hard money lenders never look at your credit score, your finances, etc. One of the things to realize, is that when the lender takes the property over – he/she owns the entire property now and can sell it. It means any payments you made to the hard money lender are forfeit. You don’t get credited.
What hard money lenders look at is the LTV. They look at the loan requested, versus the value of the property. Most lenders will lend up to 70-80% of the value of the property after repairs. That means on a $100k property, they will lend you 70-80k.
There are other variables a lender will look at, such as how long you need the money for, the amount of money you are putting down, etc to assess the cost of the loan to you. In most cases, you can expect a 8-12% interest rate, with 1-2% upfront as a down payment. It is very typical for lenders to have an independant appraisal done of the property in order to ensure the property’s value has been represented accurately.
What does a hard money lender want when giving a loan
Most hard money lenders want to see a few things.
They want to see the LTV. They want to know how much money you need, and want to know how much the property’s value is. If you plan on doing repairs to the property, you should be able to assess the final sale value of the property. Based on the final LTV, the lenders will give you a loan up to 70-80% of the LTV.
Most lenders want to know the terms of the loan. Lenders want to have an understanding of what your exit strategy is, and how long you will need the loan for. Be prepared to tell a lender how many months, or years, you’ll need the loan for.
What collateral you have. In some cases, lenders will want multiple forms of collateral for the loan – if the property’s value isn’t significant enough.
Is the loan for raw land, or for an existing property. Many lenders will not lend for raw land or if you are planning to demolish the property and rebuild it.
Hard money isn’t easy – but it definitely is fast
Hard money loans aren’t the easiest to get. They can be difficult. Hard money lenders scrutinize whether the property justifies the loan you’re asking for. If the final value of the property doesn’t justify the loan – you simply won’t get it. Ultimately, almost any business deal ends at this junction. If you want to get approved, make sure you have a property that MAKES SENSE.