Hard Money is...

A type of mortgage that is know for the following...

• Fast -taking weeks or days to fund loans
• Easy -(few credit, income, and employment requirements)
• Requires a smaller (or zero) down payment
• Is a ready source of capital available to real estate investors
• Is flexible, and accommodating

Convenience: Some borrowers don't meet the guidelines of traditional lenders, and may have to turn to private investors for funding. Hard money borrowers may include those who:

Have low credit, Want to buy distressed of "fix-up" properties Need to close quickly Are self employed Cannot verify income, Wish to buy in the name of a separate corporate or business entity

Key Benefits

However, all things considered, Hard Money will enable you to accomplish these things that bank-financed investors cannot achieve:

Move on real estate deals quickly, as if you had cash in your pocket.

Buy properties in need of repair, which you can then subsequently improve to develop equity or resell for a cash profit. Banks will not lend on distressed assets.

Leverage your cash: with a 10% down payment, you can purchase twice the property that you would be able to buy with the same money through the bank. Sometimes, hard money lenders require no down payment at all.

Enter real-estate markets and property types that banks won’t touch.

Develop amenable local relationships: your lender will likely be someone who you can meet and shake hands with. Often, hard money lenders have been in your position, and can offer valuable advice and contacts in the interest of mutual success.

Borrow against the future value of the property. Banks consider the purchase price of the property to be its true value.

The Banking Process Bankers make mortgages from pools of money created by depositors. The bank then receives interest from these mortgages. The amount of interest that received from the mortgages less the amount of interest paid to depositors constitutes their profit. In the modern day, the institution that initially creates the mortgage may not be the entity that the borrower pays interest payments to. This is because most individual mortgages end up in large pools of similar mortgages called [ name ] owned by separate investors and institutions. Bankers' flexibility is restricted in a large part by their need to abide by federal regulations designed to ensure that home mortgages are available at a fair rate to qualified borrowers. Some of these regulations include [list regulations].

The Hard Money Process [Illustrated] Generally, a hard money lender is someone who lends his or her own money for projects, or in many cases the cash comes from a pool of other investors. In the case of an investor pool, the interest from the mortgage may go directly to the behind-the-scenes investors rather than the lender who acts as a facilitator. Hard money lenders are rarely as large as banks. However, unlike banks, they also need not worry about federal regulations and requirements, and can lend their money to whomever they please. This is where the flexibility comes to play.