Top Reasons Borrowers Don’t Qualify for Hard Money Real Estate Loans

Top Reasons Borrowers Don’t Qualify for Hard Money Real Estate Loans

I receive calls everyday from Real Estate investors wanting to borrow private money (hard money) through my company and more often than not, I have to tell them no. Inexperienced borrowers often make the same mistakes so let’s review.

1) No down payment or too small of a down payment. 

Private lenders require a minimum of 35% down most of the time. If you are looking for a no money down loan or very little money down, the only place to go is to either friends/family/business associates willing to co-invest with you or to the banks. Regular banks have a product from the Federal Housing Authority called FHA where you can buy a house for as little as 3% down. However, these loans are difficult to qualify for and can only be used for personal residents and not for investments.

2) The purchase price and loan for a home is just too small. 

In places like the San Francisco Bay Area of California and New York City, this is usually not a big problem but private lenders...
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