Choosing Between Commercial Hard Money Lenders Choosing between commercial hard money lenders is becoming increasingly difficult, as more and more lending firms enter the marketplace each year. These privately funded property financiers play a critica role in the modern real estate industry. However, with so many options to choose from, it’s important to understand which elements you should note before choosing a lender. So, before making your decision, we recommend that you consider the following:
(1) Reputation While this seems to be a “no-brainer”, the reputation of a lender can tell you a lot about their business model. Do they have a high number of foreclosures? How are they rated by other borrowers in terms of customer service, application processing, etc.? Most of these firms have NO interest in taking a property over in the event of default, and will try to work with the borrower as much as possible. Research these elements before settling on your choice!
(2) Application Process Most hard money lenders have a streamlined application process. Because real estate investing requires that buyers act quickly, it’s important that the application, appraisal, and funding processes are simple, fast, and accurate. This is an important one, so be sure that you are choosing a reputable lender that ALSO has a quick and easy application process in place.
(3) Property Expertise Finding a lender that truly understands the market or segment that you are interested in is paramount. For example, why use a lender that specializes in residential properties for a commercial purchase? You want people who KNOW what they’re doing! Making a choice between commercial hard money lenders doesn’t have to be difficult. Simply keep the mentioned points in mind and ask questions – in doing so, you can be certain that you’re getting a reputable organization that can make your property purchase a reality.