1. Save Some Money First!

As a Hard Money Lender we want to see that our borrowers have money in the bank. It’s important to save before you get into the real estate investment and fix and flip business; however, a good way to get started when you have minimal funds is to partner up with someone who does. The good thing is most Hard Money lenders can fund a majority of the cost (sales price and rehab) not to exceed 70% of the final market value.

2. High Interest Is Normal

Hard Money Lenders evaluate their risk lending their funds on every investment deal, regardless of current equity. To safeguard our investment, interest rates and origination points are higher than what a bank offers. Most NFC loan terms range from 6-24 months in length, 10-14% annual interest, and 0-5 points. NFC routinely negotiates these terms because we understands no one investment is the same.

3. Avoid Lenders Disguising as Hard Money Lenders

Some “lenders” operate under the mask of direct hard-money lenders to broker another party’s investment. Knowing this, it is in your best interest to know your Hard Money Lender before making the decision to do business with them. NFC offers free consultation before before we begin any transaction so both parties get to know each other and have a clear understanding of the whole process.

4. Work With a Transparent Hard Money Lender

If your Hard Money Lender does not provide detailed documentations putting in writing both party’s duties and outlining the entire lending process – RUN! NFC provides extensive documentation outlining such information and disclosing every interest – not to mention free consultation before we begin.

5. Avoid Preying Hard Money Lenders

Some Hard Money Lenders prey on financially vulnerable borrowers with poor credits by offering them a deal too good to be true. BE VERY CAUTIOUS IF IT SOUNDS TO GOOD TO BE TRUE. The reality is both parties want a finial gains and Hard Money Lenders make their money on higher than usual interest rates and points – and no lender would risk substantial investment risk free without some catch.

6. Understand LTV to Know How Much You Need

You buy an investment for $200K that needs $30K in repairs, and has a a market value of $300,000. Your costs are $230K PLUS closing costs. A typical Hard Money Lender will lend up to $240K (80% of the market value). Ask us how we can save you closing costs!

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lets make your deal happen