By Reggie Halili

Hard Money Lenders are private individuals that lend their own money for short periods of time at higher than bank interest rates and lower loan to value ratios. These loans are asset backed, secured by real estate or other adequate collateral. Interest rates vary from 12% to as much as 24% and for terms usually not exceeding 12 months.

Hard money loans are tight and expensive because they are more difficult to source. Hard money lenders do not require the usual due diligence that banks and mortgage lenders do, therefore, are prone to higher default rates. There are risks involved, which greatly limit the willingness of private investors to provide this facility.

Despite the difficulty in securing and fulfilling this type of loan, Hard Money Lenders continue to play a critical role to small sized businesses particularly real estate investors. Real Estate Investors need the ability to act on opportunities quickly, especially in upbeat and thriving markets. While Banks take anywhere from 30 to 90 days to process loans, (about the same time a good real estate investor needs to flip an opportunity), Hard Money Lenders provide financing within weeks.

Hard Money Lenders make cash available for Real Estate Investors to buy and rehab investment properties with the intention of selling right away. The high cost of capital doesn’t really matter much if you’re looking at returns of over 50% in as short as 3 months.

Here are some tips to consider when working with Hard Money Lenders;

1)    Stay away from Relatives and Friends. There are exceptions to the rule but borrowing money at higher than market rates and with great risks involved should be kept out of your immediate circle.

2)    Play the Field. Look at the Rates and Terms closely. One will certainly be better than the other and your goal is to find that. Once you are comfortable, work with that lender.

3)    Speed and availability is Key. Go with a lender who is willing to review your deals with you. They need to see the risk and appreciate the rewards of the deal in the same manner.

4)    Do your due diligence. Review the loan agreement and read each clause carefully. This will increase your comfort level and prepare you for any eventuality.

Hard Money Lenders can help take your business over that hump or to the next level. It’s not the be-all end-all solution but it is a tool that will take you to where you want to go, quickly.

Why would you even consider a property manager? For one thing, you decided to invest in a rental property, but don’t know what to do next. You’re not alone. The realities of maintaining and running a rental property can quickly become overwhelming- even to the savviest investor.

Many times, people choose to hire a property manager to help them in the day to day tasks, which could be just the answer you’re looking for. To help make up your mind if hiring a property manager is right for you, here are 10 reasons that could help influence your decision.

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