Hard Money Loans

We provide hard money loans to purchase and renovate non-owner occupied single family homes in the Atlanta, Georgia area.

We can finance 100% of your deal including purchase, rehab, and closing costs up to 75% of the after repaired value.

Geographic Area                Atlanta, Georgia

Property Type                    Residential non-owner occupied                                             single family homes

Loan Size                            minimun $50k

Loan Term                          6 months

Interest Rate                     15% interest only, paid mo.

Loan Fee                             4 points

Loan-to-Value                    Up to 75% ARV

Prepayment Penalty          None

Lien Position                       First lien only

Credit Requirement           600 middle score

• Most hard money lenders have certain geographic areas that they deal with.  Sometimes certain neighborhoods in that area are blocked out.

• Although a few will deal in other types of property, most only do residential non-owner occupied single family homes

• Different lenders have different minimum loan size, and sometimes maximums.

• Loan terms are short term.  This one is 6 months.  Some lenders have different rates for different length terms.  Maybe 3 mo., 6 months, 1 year

• The 15% interest rate is typical, but the rates range from 11% to 18%.

• The points usually range from 4 - 5.  That is roughly $1,000 per point.  This hard money lender will roll the points into the loan, but everything has to be under 75% of the ARV.  Some hard money lenders will require that the points and other closing costs be paid in cash at closing.

• There should never be a pre payment penalty on a hard money loan.

• Usually it is a first lien.  I don't know of any who do otherwise.

• Credit requirement will vary a little from hard money lender to lender.  The credit requirement is not usually as stringent as the regular mortgage loan.  The numbers  with the property is suppose to have more bearing on the approval, than the credit score.

1. Fully executed purchase and sale agreement
2. Detailed list of repairs and improvements needed, and cost estimate.  (back up with contractor estimates)
3. Pictures of the property (front, rear, inside)
4. List of comps used to determine ARV (include pictures)
5. Bank/financial statements for the current last past three months (all Pages)
6. Current paystub
7. Copy of social security card
8. Copy of driver's license

You will fill out forms for the lender, and sign permissions to check on the credit, and bank statements.  An appraisal showing current value, and ARV value will be ordered, or you may be asked to get the appraisal.  In either case, you will be required to pay for it.

The most common way that beginners make mistakes with this type of funding, and rehab are not calculating all the costs involved, such as closing, and the costs for holding, (including payments, and utilities).  Insurance is required of course, and it will be more expensive for the project.  Be sure you get the right type of insurance.  Another mistake often made is overestimating the price that will sell the home.  Not being good at marketing the home is also sometimes a problem.  Often a person will not give enough time to really get the job done.  Doing it yourself often takes longer, especially if you have another job.  Having others hired to do the job, often takes longer, because they may not be able to fit the job in when you need it to be done.  Another problem that comes up, is the rehabber that wants to refinance into a regular mortgage, but does not have the credit to do so.

The rehabber should have some skills in project management, or skilled in the construction or related trades.  If you don't have any of these, it doesn't mean you can't do it, but it would be wise to start with a lesser project, like a cosmetic rehab.  Another option would be to partner with an experienced rehabber for your first projects.

I have never done a total rehab project, where you move walls, rebuild the house.  Mine are mostly cosmetic.  I may need to replace a roof, or air conditioning, and in that case it is done by skilled professionals. 

I don't have a recommendation of a hard money lender.  The best way to find one would be to use your search engine, or get a recommendation of a real estate investor in the area that has used hard money lenders.

Hard Money loans are another method of creative financing.  The typical mortgage lender will not finance the project because of the condition of the property.

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