I Know You Still Have Questions, Let's See If We Can Answer Them For You Here.

I remember seeing the the interest rates on hard money loans for the first time and figured some guy called Vinny was going to deliver the cash in a briefcase and tell me he'd be back every Friday night at midnight to collect!  (LOL, you think I'm kidding, it's true!)

Why did I think like that? Because I didn't understand how it all worked.
How come they can get away with such high rates? The fact is that the rates are not really that high considering the risk they take. They are providing you an almost cash free way to buy, fix and resell houses. And sometimes people not as diligent as you bite of
more than they can chew. If it all went sideways. the lender is left with a crap house, full of problems that they then have to take care of themselves.

Try looking at it this way. This money is a cost of doing business until you get your own little stash. And even then I would still use hard money lenders. Think of it as access to capital. It frees you to do the most important part of your job, which is to find below market houses. How many offers could or would you make if you never had to worry about money?
I look at hard money lenders as cosigners of my estimate of value. If they don’t think you got a good enough deal, they’re not going to lend you any money. What a way to feel safe in your purchase; having a “stamp of approval” by another experienced investor.

Get Pre-Qualified With The Lender!

It's amazing that people are always putting the horse before the cart. Before you start
making offers on houses, get with your hard money lender and get pre-qualified.
Even get yourself a proof of funds letter. That way you’re a bona fide cash buyer. Do you know how much better the deals are when you can tell the seller that you’re a CASH buyer? The difference is night and day. The best deals come from sellers who have to move fast for one reason or another.
Our lender requires a 680 mid credit score. OK but WHY? This is one we had a little trouble understanding at first but here's the reason behind it. It's all about options! Let's say you take a hard money loan with our lender. Built into the loan is a six month payment reserve. We didn't like this at first because it meant the deal had to be a VERY good one to fit the program BUT, after thinking about it, we realized that the six month reserve is a good thing. It means that let's say you bought your house and it closed on June 1st. You have already made the monthly payment on it for June, July, August, September, October and November! Think about it, IF for some strange reason, you have that house for that long, you STILL don't have to worry about coming out of pocket for a dime during that time!

Back to that 680 credit score. Let's say your monthly hard money loan payment on your rehab is $1,500.00. We just said you have already paid six months in advance which is fine BUT, wouldn't you want all that money back?
You should be prepared to re-finance the loan as soon as you can after doing all the work.
Let's say you did a re-fi during the first 30 days, YOU GET THAT OTHER 5 MONTHS PAYMENTS BACK!! That's $7,500.00 back in your pocket AND, if you refinanced the property, your conventional loan rate would probably cost you around $800 per month.
Your hard money monthly payment is $1,500, your conventional financing monthly payment is $800. YOU DO THE MATH!

Refinancing is part of your exit strategy and should be considered. It's an option!

I hope the above made sense and explains why the hard money lender needs to see a 680 credit score. Ideally you will have a 680 yourself but if not, you can always bring in a credit partner who does so don't worry too much, it's not a deal breaker.

You Have An Opportunity To Build A Good Relationship With The Lender, DO IT!

Setting up a good rapport with a reputable lender is vital. Getting good deals in real
estate requires fast action. While you will need an appraisal for the file along with some other documentation, you need to act quickly! You can work with our lender online but don't be afraid to call them, talk to them, ask questions and be proactive in the entire process.
You'll be glad you did when it comes to getting the money and moving on to future deals.
The hard money lender is your friend, they are your "money guys" so take the opportunity to develop a good relationship with them as soon as you can.

We have a great relationship with our lender and trust me when I say, communicating with them every step of the way is critical.
We had our 680+, found our deal, got it funded and closed and were ready to start work.

What Happened Next Wasn't Pretty For A While!

We had a General Contractor recommended to us. Wow, what a nightmare he was. Let's just say he turned into a complete asshole after about 3 short days! The original written  contract went right out the window, he kept trying to jack up his rates, he had nobody at the job-site, spent all day bitching about money and the entire situation got completely out of hand very quickly.
That left us with one option, throw his ass off the job!
We paid him what we felt was fair (more than fair actually) and got rid of him BUT it turned out to be the best thing we did because within 24 hours (after posting ads on Craigslist) we found a whole bunch of individual contractors who showed up and performed the work required in a timely, professional manner until it was complete AND at a rate we wanted to pay, not full retail!
This entire situation told us that we didn't necessarily need a GC, we just needed our own teams who we knew we could rely on. We now use the same guys over and over and it works out great.

LOOK, YOU DID ALL YOUR NUMBERS UP FRONT, IF YOU HAVE SAY 20 GRAND TO DO A REHAB, HOW CAN SOMEONE COME ALONG AND CHANGE ALL OF THAT? HE CAN'T!
YOU HAVE A BUDGET SO STICK TO IT AND FIND PEOPLE WHO CAN DO SPECIFIC TASKS FOR WHAT YOU HAVE TO PAY AND NOT WHAT THEY MIGHT WANT. THEY SHOULD BE ABLE TO UNDERSTAND THAT YOU ARE AN INVESTOR, NOT A RETAIL CUSTOMER AND THAT YOU WILL GIVE THEM MULTIPLE OPPORTUNITIES TO WORK FOR YOU OVER AND OVER AGAIN.

Oh No, The Weekly Visits From The Lender's Local Representative!

After one week in the property, we were called by the hard money lender's local guy.
Why is he coming? Duh, he's coming to see how you're doing and release your rehab funds. He Is Your Friend, Be Nice To Him :)
I'll explain that. Let's say your rehab budget is 20 grand. You are NOT going to just get handed this up front, you get it in weekly draws following completion of specific jobs.
Let's say your scope of work included $2K for painting, $3K for flooring, $5K for kitchen cabinets, $5K for bathrooms and $5K for a new roof (a very simple example here)
The rep. arrives and you have told him you want $10K because you have done the roof and the kitchen. Well he can't just take your word for it can he? He is protecting the lender as well as you so he will arrive, take photographs and talk to you about your progress.

If you purchased them but don't have the kitchen cabinets on the wall, guess what?
You won't get all the money for that part of the rehab because they are still not a part of the house and could be removed or stolen.
When you go online to submit your weekly draws, make sure you have done the work you are requesting payment for! If you painted half the house, request half the money, if you did it all, ask for all the money. You get the idea!

It may seem obvious but it's something we ran into the same situation so make your draw requests according to the work you have completed, not started.
Don't forget too that you are requesting money in arrears so you have to have some money to start the project! You can probably tell contractors they will have to wait until you get your draws but you will need money for purchases. A Lowe's or Home Depot credit card obviously helps too.

Try to think of your weekly visits from the lender as just another part of the service they provide. It's good for you to see him, take advantage of his advise and support and you'll be just fine.

Upon Completion of Your Flip. THIS IS HUGE!

When do you think you should start marketing your property for sale?
Answer, 5 minutes after you buy it!!!

Trust me, in today's crap market, you need to get that thing marketed as soon as physically possible. Get creative, make flyers, tell your RE agent to get it listed right away, have a simple web site done for the property, think outside the box (I hate that term) and DO NOT think for one minute that putting a "For Sale By Owner" sign in the yard is going to get your house sold. You need the thing gone and gone fast so get creative!

You have your contractors in place and working (and hopefully you have your project manager on site to make sure they are) SO WHAT ARE YOU DOING YOURSELF?
Think about it, is your time best spent painting an outside shed or pulling weeds or should you be marketing the property for sale?
Should you be mixing quick-set for the tile guy or should you be getting a solid plan in place to get that property on the market and sold so you can get paid and move on to the next one?

I don't think I need to ask any more of those do I?

OF ALL THE PEOPLE AT THE JOB, YOU GET PAID LAST SO BE ON TOP OF THINGS!


This Could Go On And On So..............

Here's a few one-liners and tips for getting started and using your hard money loan.

YOU MAKE ALL YOUR MONEY UP FRONT WHEN YOU FIND THE RIGHT DEAL!

FIND THE RIGHT DEAL AT THE RIGHT PRICE AND YOU SHOULD BE GOOD TO GO!

Do You Homework! Do the comps, do them right, get in the house, run the numbers and if the deal doesn't fit, don't try to make it, just walk away and look at the next one.

YES YOU CAN get a screaming foreclosure deal direct from a Bank! You will have to present an offer and put up a grand for escrow (you'll get it back at closing) but don't be afraid t have your RE agent put in offers for you. If you have an agent who doesn't like to work with Investors, FIND ANOTHER AGENT!

The lender WILL require an appraisal so make sure you have done your homework again. YOU will pay for appraisal so make sure that home you think is worth $200K really is, the last thing you need is the appraisal coming back at $150K

Get your contractors over there AS SOON AS POSSIBLE! You need to know your estimated rehab costs prior to making an offer (unless you have a very good knowledge of the costs yourself of course)

Your GC or contractors may have to meet you at three or four homes before you buy one. They better be prepared to do this for you. If they are not, get rid of them too!


The lender is there to help you and not hurt you! Take advantage of what they have to offer in the way of advice. It's free and they have a lot of it, why wouldn't you?

HERE IS THE ABSOLUTE BEST ADVICE I CAN OFFER!!!


DO IT!     PULL THE TRIGGER!     DON'T BE SCARED!     DON'T BE SCARED!

You have found a lender willing to get you into real estate investing and give you 100% of the money, what could be simpler than just saying yes and getting on with it?

DO IT!     DO IT NOW!     PULL THE TRIGGER!     DON'T LIVE IN FEAR!

CLICK HERE IF ALL YOU HAVE IS A QUESTION.
CLICK HERE IF YOU WANT AN ACCOUNT WITH OUR LENDER.
CLICK HERE IF YOU ARE SCARED AND WANT NOTHING TO DO WITH IT.

The sole purpose of this page is to let you know that it CAN and WILL be done with the right team of people backing you. I see post after post online on the RE sites from people asking question after question about what would someone else do etc.
To those people and to anyone else considering flipping houses for a living, DO IT!
If you don't pull the trigger, nobody is going to pull it for you.
Do your research, find the right deals and DO IT!

We can even set you up with an account, directly with our own lender. Just CLICK HERE
Once there, you'll see 100% of the information you need to get that hard money loan.