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Hard money lenders can help any real estate investor succeed in the investment game with their funding. Any real estate investor who can find good properties to fix and sell will be able to make a killing from real estate if he works with the right hard money lender. Unfortunately, it’s not the case always.

Most hard money lenders do not fund investors that are into fix and flip properties. Even if they do fund, they don’t have consistency in it. They change their rules as they wish and reject loan applications more often.

These lenders claim to give loans to you. But in reality, they only lend to some people. That’s why it is important for any real estate investor to distinguish between the various hard money lenders out there and work with only those that help their business…

With that said, here’s a broad classification of the various hard money lenders:

1. Commercial money lenders
2. Development property lenders
3. Bridge construction lenders
4. High-end home lenders
5. Residential hard money lenders

With this list, you can distinguish and choose the right hard lender to work with. If you focus on fixing and flipping properties for profit, the best option for you is to work with residential hard money lenders.

However, not all these lenders have the same funding options. These lenders rely on external sources of funding quite often. And certain fund sources don’t necessarily support the funding of properties that fall into the rehab and resell category.

These hard money lenders usually acquire their funds from two of these sources:

1. Lenders with funding from banks – Most of the lenders out there retrieve their funds from a bank. These lenders give out loans to investors after looking at the property. Once the loans are given out, they sell the paper to Wall Street. They take a service commission on the loan and give the rest of the monthly return to the Wall Street. This is how most banks and financial institutions operate.

You can’t just sell any type of property to the Wall Street and other major financial institutions. They have very strict regulations about the properties that can be funded. Therefore, not all properties will get funded. If you approach this type of lender with a wholesale property, they will reject your application.

2. Lenders with private investors – There are certain hard money lending firms throughout the country that operate with a bunch of private investors. These private investors are high net worth individuals that are looking for a fifteen-twenty percent return on their investments. They have made a choice to invest in real estate because it’s lucrative and more reliable than the Wall Street.

These lenders are also known as residential hard money lenders or private hard money lenders. The loans are never sold to the Wall Street but their restrictions also change from time to time. In reality, there are two different types of private lenders.

Certain lenders do not have a firm decision making process. They tend to change rules from time to time and lend as they wish. If you are working with such a lender, you’ll have to dance to their tunes.

If they find a particular property valuable, they will lend you the money. Otherwise, they’ll reject your loan application straight away. You can’t tell for sure if these guys are going to approve your property. They also tend to change their interest rates often.

Other than that, there are certain residential hard money lenders who have a strong real estate background. Such companies have a firm decision making process. These people always have a set of rules for approving properties. And they always stick by them.

This makes it easier. You also get the lending rules in writing from them. This allows you to find profitable properties that meet their guidelines. They might also lend you the loan even if you were to have bad credit as long as the property is good. Finding such residential hard money lenders and working with them will be crucial to your success as a real estate investor.

Now Listen Up:

Out of all the hard money lenders out there, I’ve found one lender called DoHardMoney which have a firm decision making process and lend loans for all the profitable properties. If you’d like to find out more about them, go here – residential hard money lenders

Related posts:

1. Private Hard Money Lenders – Here’s How They Can Help You
2. Private Mortgage Lenders – Four Rules Of Thumb
3. You really don’t need a lender until you have a property
4. FAST Private Money Loans For Your Real Estate Investments!
5. Hard Money Lenders Houston TX

Tags: fix and flip, Hard Money Lenders, private hard money lenders, Private Money Lenders, Real Estate Investors, rehab and resell, residential hard money lenders

This entry was posted on Monday, August 22nd, 2011 at 7:02 pm and is filed under Hard Money Lenders. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.