Creative Ways to Find Down Payment Funding

 

As a real estate investor, you’re all too aware of the challenges you may face when you’re trying to find a down payment on house you really want to buy. Unfortunately, many people aren’t able to purchase the properties they want because they can’t fund the down payment—but as a real estate investor, you may be a little more resourceful than the average Joe.

So how can you fund a down payment if you’re having a tough time?
Creatively Funding a Down Payment
Because a hard money loan typically requires you to contribute toward the property’s purchase, if you don’t have the cash on-hand when you find a great deal, you may need to get creative to make the funding work.

Ideally, you’ll have saved up for an occasion such as this—but if you haven’t:

Ask for money instead of gifts. If you have a big event coming up, ask friends and family for cash rather than gifts. However, this isn’t feasible for everyone. (It’s just an idea!)
Talk to the seller. Typically, sellers who have had their properties listed for a long period of time are much more flexible than those who have recently listed properties. It may be a good idea to talk to the seller of the property you’re interested in buying and see if you can work out a deal.

Do You Need a Hard Money Loan in Atlanta?
If you’re looking for a hard money loan in Atlanta, we may be able to help you.

Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of […]

From Salaried Employee to REI: What You Need to Know

When you leave a company—one that gives you health insurance, paid vacation time and other benefits—to become a real estate investor, it’s a little scary.

Okay, so it’s extremely scary.

What if you don’t make it? What if things go horribly wrong?

Everyone thinks about these things. We’re hard-wired to envision the worst-case scenario, so it makes sense that many people change their minds and avoid taking the leap.

But what if you’re one of the few who can see past the potential bad outcomes?

Here’s what you need to know about the major life change involved in leaving your 9-to-5 behind for real estate investing.
What’s Critical to Becoming a Successful REI?
An entrepreneurial mindset is a critical component of becoming a successful real estate investor. Sure, you’ll make mistakes—everyone does—but when you have the right mindset, you can overcome those hurdles and turn them into learning experiences that will make you more money in the long haul.

According to Paul Esajian, co-founder of Fortune Builders and CFO of CT Homes, successful entrepreneurs in any field have good habits that include:

Visualizing success. You’ll need to set goals and envision how you’ll achieve them.
Network with other professionals. It’s essential that you build an extensive network of contacts, including real estate professionals, contractors and others who can help you achieve your goals.
Maintain your confidence and strengthen your willpower. You have to be confident that you’ll achieve your goals—and when you do, your confidence levels will reach new heights.
Get up early. Getting up early sets the tone for the rest of the day. Statistics have shown that the most productive, successful people get up by 7 a.m.

Do You Need a Hard Money Loan in Atlanta?
If you’re looking for a hard […]

Private Money Lenders vs. Hard Money Lenders

What’s the difference between a private money lender and a hard money lender?

The short answer is that there are some differences—and if you’re a real estate investor, you’ve probably heard the two terms used interchangeably.
Differences Between Private Money Lenders and Hard Money Lenders
A hard money lender such as Paces Funding is able to provide capital quickly. Private lenders are able to do so, too, but there are differences that may make all the difference in the world.

Hard Money Lenders

Hard money lenders typically have lending criteria. For example, Paces Funding’s loan criteria for residential properties include:

A 6- to 12-month term
No prepayment penalties
Investments and cash-out refinances only
Loan-to-value ratio of up to 65 percent of the after-repaired value of the collateral
Rates vary depending upon collateral and loan structure
Borrower needs to contribute 15 percent of the project cost
Loan fees are typically 4 to 5 percent of the loan amount
Loan sizes range between $25,000 and $3 million
Collateral is the first lien mortgage on the real estate the loan is going toward

Private lenders are different in that the terms can vary based on each transaction, and the results are entirely based on whether you and the private lender can agree.

Credit scores do matter when you’re taking out a hard money loan, but they don’t matter as much as they would with bank financing; that’s because hard money lenders are able to look at the “big picture” and lend money on the perceived after-repair value of a house.
Do You Need a Hard Money Loan in Atlanta?
If you’re looking for a hard money loan in Atlanta, we may be able to help you.

Call us at 404-814-1644 or contact us online to find out […]

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    The Real Reason Your Construction Loan Was Denied by a Major Lender

The Real Reason Your Construction Loan Was Denied by a Major Lender

If your bank will not approve your construction loan, you may feel as if it’s because of something you’ve done. In reality, however, you are most likely part of a growing trend. We’re going to crunch the numbers for you to identify why you are not alone, and what you can do about it.

As the reports from the FDIC show, bank-approved real estate loans in general have been on the decline for years. The third-quarter report for 2015 shows that real estate loans accounted for less than 3 percent of all bank activity – that’s not much, especially when considering construction loans accounted for over 7 percent of all bank activity in 2010, just 5 years prior.

Using the FDIC report generator, you can see for yourself that the banks made over $3 billion in profits from real estate loans in the third quarter of 2015 (the most recent report available). However, of the $3 billion, construction loans only accounted for $249,000. This number is very small to begin with, but it is down more than $100,000 from the same time 5 years ago.

Bottom line, this trend shows that construction loans are simply not making enough money for the banks to take them seriously. They are too risky of an investment for banks, and the real estate market is not strong enough to guarantee a profit for the banks if they were to seize a property. As a result, they often won’t touch these types of loans.

Instead, banks want to focus on the largest construction contracts possible so that they can minimize the risk and generate the most money at once. Fortunately, you can choose to work with a hard money lender instead of wasting […]

How to Find a Hard Money Mortgage Lender

 

When you’re a real estate investor looking for the financing you need to jump on a great deal, the truth is that there aren’t many lenders capable of fitting into your timeframe.

If you’re like many REIs, you’ll turn to a hard money lender.

But how do you find a hard money lender who has agreeable terms and can get you the financing you need… when you need it?
How to Find a Good Hard Money Mortgage Lender
Before you take out a hard money loan, it’s a good idea to become familiar with the terminology involved – that way, when you talk to potential lenders, you’ll understand exactly what they’re saying. (We have a great hard money loan glossary you can use to get started.)

It’s always a good idea to research hard money lenders before you begin calling around. You’ll need to know several things, such as:

How long a hard money lender has been in business
How quickly they can provide financing
What terms they’re able to offer
What criteria you must meet to get a hard money loan

Not all hard money lenders can offer you the same terms and rates, so it’s always best to determine what will work best for you.
How Hard Money Loans Work
When you’re ready to apply for a hard money loan, you’ll need to gather all the important documents. That includes your purchase contract and renovation list; you’ll need those before approval.

After you submit your application, your lender will carefully review it and, in most cases, call you to talk about it. Once you’ve provided all your documentation, the lender will likely provide you with a good faith estimate that you can review; after your approval, the lender will order and appraisal and title. The […]

Is a Hard Money Mortgage the Same as a Bad Credit Mortgage?

There are a number of reasons an investor may choose to use a hard money loan instead of a conventional mortgage – and one of them is credit.
Is a Hard Money Mortgage the Same as a Bad Credit Mortgage?
It wouldn’t be fair to say that a hard money mortgage is the same as a bad credit mortgage. In fact, it’s like comparing apples to oranges.

Hard money loans are typically short-term financing. Most hard money loans last for 12 months or less, and some people use them to bridge the gap between selling one property and purchasing another, or between purchasing a property and transitioning to conventional financing through a bank or other lender.

Others use hard money loans to purchase properties quickly. Because this type of financing takes a relatively short amount of time to go through (typically within 10 days if there are no unusual circumstances), it enables investors to get funding before someone else snatches the property off the market.

A hard money loan can be beneficial if you don’t have perfect credit, as well. Hard money lenders look at the “big picture,” which includes far more than your credit score alone. In fact, it includes the potential value of the property, your ability to repay the loan, and your investment in the property.
Do You Need a Hard Money Loan in Atlanta or the Surrounding Communities?
If you need to take out a hard money loan, which isn’t the same thing as a bad credit mortgage, we may be able to help you – even if your credit history is a bit checkered.

Call us at 404-814-1644 or contact us online. We’ll be happy to answer your questions and explain the hard money loan process to […]

How to Find the Best Hard Money Lender in Atlanta, GA

If you’re looking for a hard money lender in Atlanta, GA, chances are that you’re a real estate investor or you’re otherwise self-employed, which can make traditional financing difficult.

In other cases, people use hard money lenders in Atlanta for:

Bankruptcy bailouts
Emergency cash-out for miscellaneous needs
Foreclosure bailouts
Short-term financing related to real estate for any reason
Other transactions lenders can’t perform

If you’re shopping around for the best hard money lender in Atlanta, here’s what you need to know.

Finding the Best Hard Money Lender in Atlanta

In order to find the best hard money lender in Atlanta, you’ll need to ask several questions. Here’s a list to get you started:

What are your interest rates?
What loan-to-value are you looking for?
How long may I borrow money?
What additional costs will I incur?
Can I borrow money for repairs?
Does credit matter?
How much money do I need to put down?
When do I pay interest?

You’ll be able to get a grasp on how hard money lenders all over Atlanta operate by asking these simple questions, and you’ll be able to determine whether this type of financing is right for you.

You’ll also need to find a lender who has extensive experience and is local to Atlanta.

Do You Need a Hard Money Lender in Atlanta?

If you need to take out a hard money loan in the Atlanta, GA area, call us at 404-814-1644 or get in touch with us online. We’ll be happy to answer your questions about hard money loans and walk you through the entire loan process.

 

What is Hard Money?

A hard money loan may be exactly what you need if you’re a real estate investor (or if you want to become one), so it’s important that you understand what it is and how it can help you.
What is Hard Money?
Hard money is a type of loan that relies on an asset as collateral. In real estate investing, that’s typically the house you’re borrowing against. These types of loans are backed by the value of the house, not necessarily by the borrower’s credit history or other factors.

For that reason, though, these loans can still be risky. In most cases, hard money loans have lower loan-to-value ratios than conventional loans do.
Interest on Hard Money Loans
Interest on hard money loans is typically higher than it is on conventional loans. That’s one reason these are usually only short-term loans – and it’s why they can be immensely helpful to real estate investors who intend to buy a property, fix it and re-sell it.
What is a Loan-to-Value Ratio?
A loan-to-value ratio, commonly called an LTV ratio, is an assessment conducted by financial institutions – including hard money lenders – to determine how risky a loan may be.

Large lenders, including banks and mortgage companies, are often reluctant to accept risky loans. However, in some cases, hard money lenders are willing to extend credit for up to 65 percent of the loan-to-value ratio on a house.
Who Needs Hard Money Loans?
Many people are able to benefit from hard money loans, including real estate investors, developers and others. Typical uses for hard money loans in Atlanta include:

Bankruptcy bailouts
Emergency cash-out
Foreclosure bailouts
Self-employed borrowers
Transactions that conventional lenders can’t perform

Could You Use a Hard Money Loan?
If you need a hard money loan for any reason in Atlanta, […]

Hard Money Loan Glossary

When you take out a hard money loan – particularly if you’re a new REI – you’ll hear quite a bit of terminology. You may already be familiar with some of it, especially if you’ve taken out traditional loans before. However, some of the terms used in the hard money lending industry are different from those used in traditional lending.
The Hard Money Loan Glossary
Appraisal
An appraisal is a statement of value on a piece of property. It’s put together by a credentialed expert who determines value based on condition, age and demand.
Assignment
An assignment is a written document that transfers an interest from one person to another. Typically, this document transfers an interest other than real property.
Clear Title
A clear title is one that doesn’t have any defects or encumberances. A defective title can allow someone else to make a claim to property that you own.
Contingency
A contingency in an agreement depends on action or inaction on behalf of one of the parties involved in a real estate transaction.
Deed
A deed is a written document that transfers ownership of a property from one party to another.
Deed of Trust
A deed of trust is an instrument that allows the legal title to a piece of property to be used as security for a loan.
Due on Sale Clause
A due on sale clause is typically a provision in a deed of trust that asks for the loan to paid off when the property is sold or transferred.
Escrow
Escrow is the holding of the documents and funds involved in a real estate transaction until the closing process is complete.
First Trust Deed
A first trust deed is a lien on property that supersedes any other lien.
Lien
A lien is a claim against property.
Do You Need a Hard Money […]

Investors and Developers: Could You Use Hard Money?

In some cases, investors and developers are better off taking out a hard money loan than using a traditional loan.

So when is a hard money loan better for developers and investors?

Typically, hard money is a better choice when an investor or developer:

Needs to close quickly and following traditional funding routes would take too long. Often, banks and other traditional lenders take several weeks – if not longer – to process the paperwork on a loan.
Has several good opportunities but not enough cash to accept them all. Banks won’t extend credit if it appears you’ll become over-extended.
Wants to take advantage of an opportunity without the financial strength banks require. While your credit scores and financial history are important with a hard money loan, they carry far more weight with a conventional loan – and that can make it difficult to obtain financing in many cases.
Has credit through a lender, but the credit isn’t sufficient for the investment.

Credit and Hard Money
Although credit is important when you’re interested in borrowing hard money, usually the collateral is more important than a borrower’s credit history. Because these types of loans, which can be for up to 65 percent of the collateral’s after-repair value, or ARV, are typically short-term and designed for investment purposes, they’re often the way to success for investors and developers.
Are You Looking for a Hard Money Loan in Atlanta?
If you’re interested in obtaining a hard money loan in Atlanta or its suburbs, we can help.

Call us at 404-814-1644 or get in touch with us online. We’ll be happy to answer your questions and walk you through the application process. You can also apply online today.