Hard Money Lenders Meaning- (What is Hard Money Lending?)
youtu.be
The YouTube video features an interview with Dustin Hogue and Susanna Luther from Faster Funds Lending, a local hard money lending company. They explain that hard money lending is a short-term loan based on the deal, not necessarily the borrower's financial history. Borrowers can use hard money lenders for quick access to cash, especially for investment deals that need to close quickly. Faster Funds Lending can lend up to 100% of the purchase and rehab costs, without requiring the borrower to put money down. They recently closed a deal in just six days from the time they walked the property to closing.
Faster Funds Lending is looking for two types of borrowers: landlords who use the BRRRR strategy and rehabbers who flip properties. The costs associated with getting a loan from Faster Funds Lending include a six-month interest-only term at an annualized rate of 12%, which is one percent per month while the loan is out, and a three percent origination fee on the back end of the loan.
Faster Funds Lending's marketing strategy is focused on their borrowers' experience and their association with RIA. They lend up to 100% of the purchase and rehab costs, depending on the area and borrower qualifications. They typically lend 70-75% of the ARV. Faster Funds Lending's approach to hard money lending is unconventional, as it focuses on win-win lending where both the borrower and the lender benefit.
Faster Funds Lending emphasizes the importance of liquidity and reserves in a borrower's bank statements to ensure they can handle unexpected expenses. They stress the importance of having a win-win deal, where both the borrower and the lender benefit. Faster Funds Lending does not charge an appraisal fee, which is a significant cost savings for borrowers.
The main differences between a hard money lender and a private lender are that a hard money lender vets the deal and focuses on the numbers, while a private lender may lend based on trust and character without knowing much about real estate. Private lenders have limited resources, while hard money lenders have more access to funds. Borrowers can strategically use both resources to lower costs and do more deals by borrowing purchase money from a hard money lender and using private funds to fund the rehab.
The YouTube video features an interview with Dustin Hogue and Susanna Luther from Faster Funds Lendi