Hard Money loans have many different names including private money loans, asset-based loans and in some cases rehab loans.   Hard money loans are usually based on the estimated value a home will sell for after it has been repaired.  Often times hard money lenders can make loans for the cost of the property and the costs of fixing the home for resale.  

Many times rehabbers or those who buy properties fix them and sell them for profit work with a hard money lender to finance their investment homes.  A few things to note about using private money or hard money lenders:

·         Interest rates are slightly higher than you would see from a bank because the loans are being made on properties that are in various stages of disrepair and there are risks when making loans on these types of properties.  This is how hard money lenders are compensated along with up front fees or “Points”.  A point is one percent of the total amount loaned.

·         Typically a hard money lenders main concern is that their entire principal will be returned if there is a problem with the property. Hard money lenders will usually make loans for much less, as a percentage, than a bank would.

·         Hard money loans can be obtained in as little as 5 to 7 days in some cases.

·         Because hard money lenders are mainly concerned with the value of the property, with no money in your pocket, sometimes no credit or income verification, you are able to borrow tens of thousands of dollars, maybe even hundreds of thousands, simple because you have secured a contract on an undervalued handyman special.

RehabList.com has made it pretty simple for rehabbers across the nation to find hard money lenders.  RehabHardMoney.com is another website created by RehabList.com that is dedicated to helping rehabbers find financing.  RehabHardMoney.com allows rehabbers looking for hard money loans to simply fill out a form and hard money lenders will contact them to discuss their proposed project. 

RehabList.com also has a forum for rehabbers.  The forum is a great place for rehabbers to find hard money financing by signing up for an account and utilizing the forum by posting  information about their project or reading through previous posts from other rehabbers or hard money lenders.  The ReahabList.com Forum provides great opportunities for you to connect with others in this industry that can be of assistance to you throughout your house flipping career and it’s completely free! 

Be sure to take advantage of the free resource RehabList.com has to offer for rehabbers, wholesalers and hard money lenders.

Recently I was faced with the task of selling my home in Michigan which is currently going through a state wide depression of sorts.  People are being laid off left and right, businesses are closing, taxes are high, more and more people are selling their homes and moving out of state, which is exactly what my family recently did.  I am proud to be a former Michigander, but I love my new home in Florida where the weather is nice and the economy is even better.

Trying to sell my house was one of the hardest most frustrating things I’ve ever done, along the way I learned a few things about myself and how to sell a home.  I started trying to sell my home in May 2004, my husband’s work was slowing and I was not working but staying at home with our one year old son.  The decision to move was simple, my husband needed more steady work and our 900 square foot home was just too small for our growing family.   Besides the tiny factor, the home wasn’t located in the best area and it lacked two very important features, a basement and a garage.   Having dabbled in the real estate industry years prior I realized all the odds stacked against us.  I kept reminding myself that we fell in love with the house seven years ago, somebody else would come along who would love this house just as much,  hopefully sooner than later. 

Our very first step was to partner with a realtor who would market the house and help us turn this very tiny home into somebody else’s very tiny home.  Like most people, we put money into fixing a few things around the house, painting walls and replacing old carpet, really trying to give the place a fresh clean facelift.  I felt at that point we had done all that we could do and now the fate of selling this house lay solely in the hands of our realtor.

After the first two months when only about 3 people had actually toured our home, I began to wonder, what exactly is our real estate agent doing for us?  From what I gathered the real estate agent had placed our home in the local MLS (Multiple Listing System), advertised in a local newspaper 3 or 4 times in a 2 month period of time and held one open house.  I’m not completely sure if this is normal procedure but I began to get frustrated.  When our 6 month contract with the listing agent expired and no results were produced I began to doubt the real estate agent. 

I never realized during this time that my frustrations would turn me into a crazy lady. I was clearly not happy with the results thus far and began shopping around for a new realtor.  No matter how easy it seemed it would be, telling one realtor that we were not interested in working with them any longer was not easily done.  I felt an amazing amount of guilt leading up to it but I eventually let our realtor go.  I just kept reassuring myself that I shouldn’t be feeling guilty but I couldn’t get over how horrible I handled the situation.  I now realize that I burned a bridge with somebody who had grown to be a good friend.  I seriously turned into a crazy lady and to this day I am ashamed of how I let my frustrations get the best of me and how I treated somebody who was clearly trying to help me.

As my story goes, I eventually did list the home with another realtor who did even less than the first realtor.  Our new realtor never held one open house, never ran one ad in a newspaper, the only thing they did for me was put the home in the local MLS.  After another 6 months we decided that we just couldn’t stay in state anymore and our financial situation was such that the move was imminent regardless if the house was sold or not.  In desperation we put the house for rent and moved out of state where my husband and I found steady work. 

After about a year and a half, two tenants later I decided to research advertising my home for sale on the internet.    Today I kick myself that I didn’t realize the free advertising power of the internet and how much I could have been doing to help sell my home.  Instead I was so quick to blame my realtor for not making a miracle happen for us while the market was in a downward spiral and our house clearly had many undesirable features.  I now realize I should have been putting my efforts into helping market the house. 

After a few months of searching I put together a list of what I feel are some of the best sources for free online advertising.  The best places to list a home online are places where potential buyers search on a regular basis, well known sources.  Regardless if you are selling you home FSBO or using a Realtor, if you are in the process of selling your home, here are a few great sources of free advertising.  (If you are working with a realtor, you may want to print this list and present it to them as they may not know of these free advertising resources.)

• Craigslist.org – This one is a no-brainer, who hasn’t heard of craigslist today?  Be sure to update your listing regularly and add photos.

• RehabList.com – This website lists undervalued or foreclosed properties, free to list and search for properties.

• Trulia.com – used by most real estate professionals; takes 2 weeks to post listings.

• Edgeio.com  – widely used website – great exposure here.

• Vast.com  – click on the advertisers link in the footer of the site to create a new listing.

• Propsmart.com – must create an account before adding your listing. 

• Lycos.Oodle.com  – Lycos Classified ads – click on the classifieds button in the navigation to post a listing.

• Olx.com – Free classified listings – much cheaper than your local newspaper.

• Base.Google.com – Submit to Google Base, available one listing at a time.

• Zillow.com – this site is widely used by professionals in the industry and by those searching from home to find homes for sale and market value of homes in different locations.

• Kijiji.com – free classified listings owned by ebay.com and becoming very popular.

I would imagine most people who are trying to sell a home today feel the way I did.  It’s always best to work with your realtor, make suggestions and do what you can to help sell your home.  It never hurts to plaster your home on every source available.  Eventually somebody will come along who will love your home as much as you do.

RehabList.com has launched another great tool for our users to help better analyze their real estate investments.   eRealAnalyzer offers the real estate industry’s first browser-based, integrated financial analysis solution, which enables prospective buyers to visualize and compare alternative property ownership financial metrics with a single click.  This awesome new tool provides an intuitive, graphical interface that enables buyers, sellers and real estate professionals to easily combine different ownership scenarios, such as “live in,” “rent,” or “flip,” with assumptions for down payment, interest rate, purchase price and many other key variables. 

In an effort to furnish the most helpful information about every piece of property to users, the analyzer can be used on every listing in Rehablist.com’s massive and rapidly growing database.  Investors can analyze properties and find the perfect deal by signing up as a free user on Rehablist.com and then clicking the orange analyze button found on every listing.

The eRealAnalyzer page that opens once the Analyze button is clicked gives the user a set three different scenarios; Aggressive, Moderate and Conservative and the outputs of each.  By moving the slider bars within each scenario to desired variables which include, price, down payment, interest rate, monthly rent, vacancy rate, property appreciation and rent growth, it is easy for investors to see their return in each case.    eRealAnalyzer will help investors navigate the challenge of determining a property’s affordability, anticipated pre- and post-tax cash flows, returns, and future value under different assumptions.

We realize our buyers are very concerned about ensuring their investment properties will deliver a significant return.  Some buyers are more financially savvy than others.  To empower all of our users, we wanted to provide them with a tool that dramatically simplified their analytical process.  We are confident that this new tool will do that.

Simply put, this awesome tool will make crunching the numbers to determine what properties make the most financial sense as easy as a click of the mouse and RehabList.com is looking forward to the feedback from our users regarding this new feature.

Beat the Rising Equity Down Trending Hitting the Market With a Hard Money Commercial Loan

Recent residential real estate conditions are making commercial real estate loans harder to obtain and the amount of money down is increasing substantially.  Today lenders are being more cautious when lending even for commercial real estate deals.  The market is seeing a 25% default rate on residential loans while commercial loan defaults are only 0.5%, but still lenders are raising their standards for commercial loan applicants.

Commercial real estate financing trends are stirring lenders to ask for more money down that in previous years.  In the past investors would use bridge loans and interest-only loans for their commercial real estate investment purchases with little or no money down.  Due to the slowing market many lenders are now asking for a minimum of 25 percent to 35 percent equity down to finance a deal.  Yikes!

These recent trends are making hard money lenders more popular when it comes to commercial real estate financing.   When using hard money to finance commercial property you should expect the loan to be a shorter term and have higher interest rates than you would normally see from a bank.  On the other hand, hard money lending for commercial property has many benefits to investors. Closing time can be a little as a couple weeks and depending on the value of the property the ability to finance 100% of the purchase price is possible.  Hard Money loans are asset based and depend primarily on real estate value, making it easier for people with imperfect credit history and little money to obtain financing.

For most of us 25 to 35 percent equity is hard to come by when investing in commercial real estate. Commercial hard money loans are an easy solution when the bank says no. 

Find commercial hard money lenders in your area today at http://www.RehabHardMoney.com/commercial.aspx and learn if a hard money loan makes sense for you.