Your Credit and a Hard Money Loan

Sure, credit matters.

But there are many good people who have terrible credit scores (and vice-versa).

What that means is that those good people are often ignored by lenders, and in many cases, the reasons behind their poor credit are far beyond their control.

So what happens if someone with bad credit wants to get a rehab loan?
Bad Credit and Rehab Loans in Atlanta
When someone with bad credit attempts to get a rehab loan through a traditional lender, the lender may not even look at his or her circumstances. In those cases, turning to an Atlanta hard money lender is typically the best option.


Because a hard money lender, even if they check your credit, is really looking at the most important factor: the value of the house.

In many cases, a hard money lender is able to fund a loan when the applicant has poor or less-than-perfect credit because what really matters is how much the property is worth. Remember, in a hard money loan, the property serves as collateral.
Should You Apply for a Hard Money Loan With Bad Credit?
Don’t let your credit score stop you from applying for a hard money loan. In fact, we may be able to help you if traditional lenders have turned you down. While bad credit can be a challenge, you can overcome it.
Do You Meet Our Loan Criteria?
If you’re thinking about applying for a hard money loan through Paces Funding, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take […]

What is a Hard Money Rehab Loan in Atlanta?

If you’re like many homeowners, you’ve considered getting a hard money rehab loan for your Atlanta home. However, you may not know enough about hard money rehab loans to decide whether or not it’s a good idea.
What is a Hard Money Rehab Loan?
A hard money a rehab loan is cash you borrow from a lender so you can make improvements to a property. In some cases, particularly when you own your property with no encumbrances (you don’t owe any money on it), you may wish to take out an equity loan.

Paces Funding can lend you up to 50 percent of the property’s value if you choose cash out equity lending. However, it’s incredibly important that you have a solid repayment strategy in place before choosing this type of hard money loan.

A hard money rehab loan is not quite the same as cash out equity lending is.

Many investors choose to take out a hard money rehab loan in Atlanta and improve a property, then sell it at its new value.

Projects that require extensive amounts of work are a bit riskier for lenders. That means it may be more difficult to get approval for a rehab loan. However, when traditional lenders are afraid to grant rehab loans, many hard money lenders pick up the slack.
What Hard Money Lenders Consider With Rehab Loans
Because rehab loans are typically risky, hard money lenders typically consider:

How much you paid for the property originally
The upside potential of the property
The extent of the rehab
Your personal financial situation

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

Call us at 404-814-1644 or contact […]

Common Mistakes Real Estate Investors Make

Whether you’re a brand-new real estate investor or you’re a seasoned pro, you might make some of the most common mistakes REIs make across the country.

So what are they?
The Most Common Mistakes REIs Make
Overestimating the Value of a House
Many investors—again, this sometimes applies to those who are new to the game and those who have been in a while—make the mistake of thinking a property is worth more than it actually is worth.

Typically, the easiest solution is to get a pair of appraisers to visit the home separately. Appraisers don’t know how much the lender wants to borrow, and they don’t have a vested interest in whether or not the buyer makes the purchase.
Failing to Allocate the Right Budgets in the Right Places
When you burn through your remodeling budget before you’ve even made it to the wall-painting phase, you’re in deep trouble. You’ll still need to come up with the cash to put the right finishes in the house, market it and tie up any loose ends.
Thinking That Real Estate Investing is a “Get Rich Quick” Thing
(This one usually only applies to new investors.)

Sure, on TV it looks like buying and flipping houses is a piece of cake… but any seasoned real estate investor can tell you that it takes a ton of work. It doesn’t happen overnight, either. You’ll be waiting on other professionals’ schedules, like the plumber, the roofer and everyone else whose help you need. (Face it; nobody’s a “jack of all trades.”)
Failing With Due Diligence
Yes, you have to move quickly when there’s a great investment on the horizon.

No, you can’t afford to skimp on research.

If you don’t pay attention to every detail of the deal, figure out the market conditions […]

Choosing the Right Improvements for a Property

When you take out a hard money loan to buy an investment property, some experienced professionals will tell you that you need to choose the right improvements.

However, that seems a little bit backward.

You shouldn’t buy a property unless you already know what improvements need to be made – and whether you can reasonably make them quickly and effectively enough to turn a profit on the sale.
Choosing the Right Improvements for a Property
It’s important that you’re already aware of what improvements you could make to increase a home’s value when you buy a property – but what improvements are likely to raise a home’s value, and which typically fall flat?

Improvements that often raise a property’s value can include:

Increasing space by removing non-structural walls. This can help make the house appear larger and give it a more open floor plan, which is important to a lot of buyers.
Adding lighting. One of the most popular ways to increase a home’s appeal is to add new windows, sunscoops and lighting systems.
Eco-friendly upgrades. This can include anything from solar panels to energy-efficient appliances.
Whether you choose to add tile, hardwood or new carpet, an improvement on the floors can equate to an improvement in value.

Other common upgrades include improving kitchens and bathrooms – but you always have to be careful about over-improving… especially if you’re improving too much for the neighborhood.

Improvements that may not add value can include:

Swimming pools
Extensive landscaping
High-end upgrades (especially if you’re going too high-end)
Wall-to-wall carpeting

Are You Investing in Property in Atlanta?
If you need a hard money loan to fix and flip a property in Atlanta or its suburbs, we can help.

Call us at 404-814-1644 or get in touch with us online if you have questions, or apply […]

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    New to Real Estate Investing? Here’s What You Need to Know About Funding.

New to Real Estate Investing? Here’s What You Need to Know About Funding.

If you’re new to real estate investing, you probably already know that some deals are too good to pass up – but that banks take weeks or months to approve loans, and even then, they may not give you the most favorable terms to make the deal worthwhile.

Here’s what most new real estate investors learn pretty quickly: a hard money loan is nearly always the only type of financing a new investor can get without having much capital stashed away.
Private Financing for New Investors
Because banks take so long, and because they won’t typically lend you money based on the after-repair value of a house, it’s typically best to go through a private lender. It’s important that you know private lending is different from traditional bank lending, though – particularly on these points:

Your credit score matters in hard money, but not as much as it will with a traditional loan.
Even if banks have turned you down, private financing is usually still an option.
Private financing depends on the assets you have to guarantee your repayment. Hard money is a form of asset-based lending.
The process is typically quick and easy. A hard money lender can finance you quickly enough to let you jump on great deals – the process often takes a week to 10 days to complete, but it can be wrapped up sooner.

Is Private Financing Right for You?
Ask yourself:

Will a bank or traditional lender approve me for this type of loan?
How quickly can a bank approve my loan application?
Would the bank or traditional lender give me enough money to cover my expenses when it comes to rehabbing the house?

For some people, private financing is the only option. If that might be the case in your […]

Could a Hard Money Rehab Loan Be Right for You?

It’s every seller’s dream: turning an ugly or outdated house into one that’s more attractive and appeals to more potential buyers (and at a higher price) so it can sell faster.

However, if you’re like most sellers with homes like this, you’ll need a rehab loan to make it possible.

Prior to 2008, it was easier to get in rehab loan from a bank than it is today. In many cases, investors need to turn to a hard money lender for this type of financing – but what is a hard money rehab loan, and is it right for your situation?
Hard Money Rehab Loans in Atlanta
Hard money rehab loans are generally easier to get than conventional financing is. That’s because although hard money lenders do check your credit scores, they are typically equally interested in the potential value of the home.

Although FHA 203k loans are bank loans that many people use for rehabbing a house, borrowers must qualify – and the process typically takes quite some time. In fact, it can take 2 to 3 months to fund this type of financing.

If you’re trying to sell your property quickly, you may not have time to wait for an FHA 203k loan to go through… even if you do qualify.
Do You Need a Hard Money Rehab Loan in Atlanta?
Paces Funding can help. Call us at 404-814-1644 or get in touch with us online. We may be able to extend you a hard money rehab loan for your Atlanta property.

What is a Hard Money Rehab Loan?

There are several types of rehab loans you can take out in Atlanta, but the main idea behind them are all the same – and that’s to upgrade or rehabilitate a property so it’s worth more money.

So what, exactly, is a rehab loan, and is it right for you?
Hard Money Rehab Loans
A rehab loan is money that you get from a lender to make improvements to a property. The problem with traditional rehab loans is that many homes that are in desperate need of upgrades or rehabilitation are damaged – and lenders usually require those improvements to be completed before they’ll consider giving up money when they perceive the transaction to be risky.

That leaves investors with few options, but one of them is to borrow through a hard money loan in Atlanta to complete the necessary repairs and then sell the home at its new value.

Hard money lenders may not consider the property’s future worth while determining the loan-to-value ratio, but it usually has some bearing on what the lender will think of how risky the transaction will be.

Naturally, projects that require a lot of work may be tougher to get approved on; that’s because a paint job and minor cosmetic repairs are far less risky than a vacant building that could be falling apart.

Just like with traditional loans, when you’re borrowing money from a hard money lender, it’s a good idea to have your financial ducks in a row. The stronger your credit, the higher your chances of being approved for a hard money loan.
Are You Thinking of Borrowing from a Hard Money Lender?
We’ll be happy to answer any questions you have – just call us at 404-814-1644 or contact us online if […]

4 House Flipping Myths Busted

We’ve all seen it on TV. The investor swoops in, picks up a great deal – a six-bedroom, four-bathroom house with a brand-new swimming pool – and two weeks later it’s on the market and excited buyers are willing to enter a bidding war.

Except… that’s TV.

There are plenty of myths that surround house flipping, so it’s time to put them to rest once and for all.
House-Flipping Myth #1: Flipping is Easy in Atlanta
When you flip houses, there are ways to get things done faster (and make more money). There aren’t any huge shortcuts that lead to instant gratification, though. You’ll have to find the deals, put in the work, and do the right things to sell.

The truth is that flipping homes in Atlanta is typically easier than it is in many markets, but it’s not a walk in the park.
House Flipping Myth #2: It’s a Good Idea to DIY the Rehab
For the most part, it’s better to use a contractor (or multiple contractors) when you’re rehabbing a house. Even if you have the time and talent to do it all yourself, remember that your time is valuable; the work can take you away from lining up more deals.
House-Flipping Myth #3: Any House is “Flippable”
While it would be great to be able to flip any house in any neighborhood, the reality is that some houses aren’t right for it. You have to consider the neighborhood, the overall cost of the house, and your overall cost (purchase, rehab and selling), and there’s no specific formula you can use – it’s typically a matter of combining the numbers with your “gut feeling.”
House Flipping Myth #4: The Nicer You Make the Home, the More Money You’ll Make
Designer finishes […]

5 MORE Mistakes New REIs Should Avoid

We recently wrote about five mistakes new real estate investors should avoid, but there are more than five.

Here are five more big mistakes that new REIs should avoid at all costs (because really, they can cost you a lot).
5 Big Real Estate Mistakes for New Investors to Avoid

Skipping over the research. Yes, as an investor, you need to move quickly when you find a great deal. However, you can’t afford to skip out on your due diligence. If you do, how do you know you are really getting a great deal?
Forgetting to plan ahead. While you may have a decent understanding of the Atlanta real estate market, that doesn’t mean that it will be the same when you’re finished rehabbing your house. It also doesn’t mean that you’ll be able to find a buyer or renter quickly enough to cover you when your loan payment is due.
Putting all your focus into one project. You need to keep one eye on the market for your next deal while you are working on a rehab. Otherwise, you run the risk of missing great properties and missing out on opportunities for growth.
Putting all your eggs in one basket. Unlike focusing on just one project, putting all your eggs in one basket means that you don’t have a backup plan. What if you can’t sell the home, or what if you can’t find a renter? You need to have a plan in place; think of it as an exit strategy.
Underestimating the true cost of doing business. A good rule of thumb is to multiply the amount of time and money you estimate spending on the rehab by two. It’s important that you do this before you purchase a […]

Don’t Let Your Dream Rehab Become a Nightmare

Maybe you’ve seen a house you just have to buy – it’s packed with potential, it’s in a great neighborhood and it’s exactly what you want.

Even houses that sound like a dream can quickly turn into a nightmare, though.
Don’t Let Your Dream Rehab Become a Nightmare
Sometimes unexpected issues pop up, and that’s normal when you’re in the business of flipping houses. However, you have to do the right things to make sure you don’t turn this dream rehab into a never-ending nightmare that just won’t end.
Forget Zillow and Trulia when it Comes to ARV
Zillow and Trulia are famous for letting people know what they think houses are worth – but the problem is that they’re almost never accurate. In fact, they’re usually thousands of dollars away from what the homes they list are worth. You certainly can’t trust either of those websites (or any website, for that matter) to determine what your ARV will be when you buy a house.
If the Numbers Don’t Work, Walk Away
When you find a house you just have to have, you might be willing to try anything to make it work. It may seem like a great deal until you start doing the math, and you may be tempted to change the numbers a little bit because you think you can swing the deal. This is a huge mistake. If the numbers don’t work, provided that you’re doing the right calculations, you should walk away. You’ll save yourself a lot of headache down the road.
Don’t DIY Unless You’re Sure You Can Handle It
It’s tempting to try to knock out some of the rehab work yourself, but unless you’re a professional, it’s usually not a good idea. Make sure you […]