San Bernardino Hard Money Lenders
Delancey Street is a premier, and top rated, San Bernardino hard money lender. We handle residential and commercial hard money transactions all over the state of California. If you’re looking to invest in a new property, and need funding – we can help. Most traditional lenders won’t give you money for an investment property. We, however, will. We help real estate investors get the funding they need to get the property they want. Many people are unfamiliar with what a hard money loan is – if you fall into this category, keep reading to learn more. The term, “hard money loan,” has nothing to do with the difficulty in getting it. In contrast, hard money loans are actually easier to get than traditional loans. In reality, it has to do with the collateral that a person puts up to get the loan. In order to get this loan, a person has to put up a piece of property as collateral to get it. This means you need to have a house or piece of land that has significant value to it. Most hard money lenders only lend money equal to 80-90% of the property.
When to consider a San Bernardino hard money loan
Hard money loans carry a high interest rate. The interest rates on hard money loans are much higher than traditional loans. It makes absolutely no sense to borrow a hard money loan if you qualify from a traditional lender. Here’s a few reasons why you should consider a hard money loan.
Speed: No one likes waiting around for a loan to get approved. Traditional lenders take months. There’s a lot of paperwork involved. The lender will want to check every aspect of your credit worthiness that they can get their hands on. You can expect to wait a good amount of time to hear if you are even approved.
Cannot Get Approved Elsewhere- A lot of people do turn to the hard money lenders when they are unable to get approval elsewhere. They do not have the option of working with a traditional lender, so they go with a hard money lender. Hard money lenders are a lot less picky with who they decide to lend to. They focus exclusively on your business plan, and the value of your asset relative to the loan requested.
Disadvantages of a San Bernardino hard money loan
There are some disadvantages to this type loan. Though hard money loans are approved faster than traditional loans, they come with numerous disadvantages.
High Rate Of Interest- As already mentioned, the interest rates on this type of loan are higher than what one would find with a traditional loan. Most hard money lenders charge a higher than normal interest rate because of the risk associated with investment properties.
Collateral- There is a significant risk to the collateral in question. Hard money lenders don’t look at your credit history/score. They look at the value of the collateral in question. This is because hard money lenders in San Bernardino are using the property (used as collateral) to guarantee the loan will be repaid.
Terms: Hard money loans typically come with shorter terms than normal loans. Most hard money lenders want their loans repaid in 6-24 hours. Generally, most loans are made for a term of 6-12 months only.
What documents do San Bernardino hard money lenders care about?
When you apply for a traditional bank loan, you think about having to provide a lender with a huge stack of documentation. In fact, with some loans, it may seem like you are constantly providing the lender with new information to fulfill a seemingly endless number of requests for more documentation. Many people who are interested in getting a hard money loan don’t do it because they don’t want to deal with the paperwork.
The good news is that the amount of documentation that is required for a hard money loan is usually much less than a traditional loan. Hard money loans are used for unique situations that do not fall within the lending parameters of a traditional loan. Below are some examples of documentation that a hard money lender might ask for.
Hard money loans are used to purchase real estate. Because of this, applicants must make a down payment on the property. Depending on the property type and the overall loan, it is common for a hard money loan to require as much as 20 to 40 percent of the sale price. Therefore, one of the requirements that many hard money lenders have is that you provide bank statements that document your liquid assets. Some hard money lenders also require you to prove that you will have funds available after the down payment and closing costs. They want to make sure you won’t run out of money after buying the property.
The lender will typically ask for some documentation regarding personal income. A credit report may also be reviewed. However, the credit requirements for a hard money loan are relatively minimal. Some hard money lenders do not have a minimum credit score requirement at all, and they look at the full picture to determine loan approval.
Hard money loans are short-term loans secured by real estate. Delancey Street provides hard money loans for both commercial and residential properties. Because the loans are collateralized by real estate, documentation regarding the property is critical. Hard money loans are typically used to finance either the purchase of a property, or improvements of a property. In some cases, it’s possible to refinance a property and cash out. For example, the money may be used to develop land, to rehab an existing property, or to refinance an existing property. It’s possible to take a hard money loan to improve a property, and then flip it. After you sell the property, the funds are used to repay the loan. San Bernardino hard money lenders will want to see things like property documentation related its current condition may be needed. If the hard money loan request is for a purchase, a sales contract and proof of money may be required. In most cases, title insurance is also required before the loan can close.
If the property needs to be renovated, documentation related to its current condition and cost to complete the renovation may be required. Typically, a statement from a contractor may suffice for this. If part of the scenario involves selling the property after a renovation, an analysis of comparable properties that have recently been renovated should be provided. If the scenario involves increasing occupancy at current rental rates after a renovation, market data should be provided. This may sound like a tremendous amount of information, but investors want to ensure the project will succeed. Investors want to ensure that you can make the project succeed, and research is critical for this.
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