Many builders and developers who have been in the game long enough, inevitably work with a hard money lender. The #1 question we hear, is do hard money lenders check credit scores? Many developers have blemishes on their credit reports. If you’ve been in the game long enough, you probably have a few issues with your credit. The good thing about hard money, is that the lender you work with does not check your credit score. Hard money is something – where a loan is given against the asset. Private, and Los Angeles hard money lenders, lend against the property. The lenders look at the property itself. They look at what the neighborhood is like, and how the properties in the area sell. The lenders look at the purchase – is it below purchase price, how complicated is the renovation, and how much time will it take it get done.
Hard money lenders look at the borrower, and look to see what type of experience the borrower has doing hard money deals. Los Angeles hard money lenders will see if the borrower has done this type of project before – if so, how many times. The lender will want to see, how organized, and concise the developer is. The lender will want to see how responsive, and how informed the lender is. In addition, the lender will look to see how much cash the developer is. The lender wants to work with someone who is cash rich, and simply needs 10-30% extra to complete the deal. It’s important, that as a hard money borrower, you be in good financial condition. The better your financial condition is – the higher the chance you’ll be able to get funding.
Borrowers need to be able to prove they have experience, steady income, and some degree of cash. Even if your credit is poor – but you have experience and sufficient cash, this is enough for a hard money lender in Los Angeles to lend you money.