HML Help?????

[LeadingEdge]

Is it possible to HML finance a group of 5 properties for 125K if the TOTAL value is appraised is over 200K but not all are bought in the same criteria of 75%LTV or less?????????

If so, when you get a HML is it normally an interst only paymnet for a short term and a balloon at 6 months or 1 year????? Do you negotiate with points when it comes to a shorter balloon time????

After getting a HML to do a deal how hard is it to do a bridge loan to wrap these all under one umbrella with conventional or subprime lenders??? Are they contingent upon same scrutiny of personal credit after already owned with Hard money??

Thanks for all replies as I am needing a quick answer for a pending transaction.

[Just Information]

The term "Hard Money" generally refers to privately placed loans as opposed to institutional loans, which usually have more stringent underwriting guidelines, for both the type of property used as collateral and the credit worthiness of the borrower. The most compelling reasons for using Hard MoneyLenders are:

1. Less time involved
2. Less qualifying to close your transactions!

Equity lender, hard money lender, private investor or what ever term one uses can be a great source of funds to do real estate transactions and the question of how to find them comes up often!

There are numerous ways to do this, and no two investors are exactly alike, so it's important to be innovative and customize your proposal to the specific "hot buttons" for each funding source.

One of the greatest advantages of real estate investing is the power of leveraging other people's money.

When a property appreciates, it will appreciate on the value not on the original investment. Therefore, if you ‘leverage’ the property with "OPM". You can make an investment even more valuable by having the property rented out. The monthly mortgage payment is being paid by the renter and someone else is paying for your equity growth in the property.

"Money is a terrible master but an excellent servant." - P.T. Barnum

The best source of cash for your real estate business is other people's money.

Perhaps one of the greatest "secrets" of the richest people in the world is summed up in those three words: Other People's Money – OPM for short. The majority of most successful people launched their fortunes using OPM.

Your goal is to not use your own cash. The most successful real estate investor tends to use OPM (Other People’s Money). Keep this in mind as you start to invest. Hold out for the limited money down or no money down deal rather than tying up a ton of money in one property. Leverage, terms and long loans can be great friends. Keep these principals in mind:


Leverage is simply controlling a lot of real estate with little or none of your own money. The more the better.
You should attempt to get the maximum loan to funding possible with each property.
The best loans have fixed interest rates and are assumable without qualifying.
Keep your equity as low as possible so you can keep more cash available for investing.

You can find "OPM" by writing to various lenders asking them if they would be interested in your real estate loan. By calling lenders in your area who might be interested in lending on your real estate proposal. By visiting in person lenders whom you think would be willing to help you. By looking on the Internet for real estate lenders who might work with you on the deals you have. By reading the Real Estate Section of your local large-city Sunday newspaper, looking for ads run by lenders in your area.

Find properties that have been sold in the past few months by searching the public records at the county recorder's office. Find property that sold to real estate investors by banks, credit unions, HUD, VA, FNMA, or any other major source and if the buyer is not an individual but say a corporation or partnership you have most likely bagged an investor.

The deeds should give the mailing address of the new buyer. Send them out a letter and tell them about your ability to locate real estate or better yet give them a call if listed.

Any one who has money could be a source of funds for your real estate purchases such as Doctors. Another great source is checking your recorders office again looking for individuals who holds mortgages on property. This has provided me a great source for hard money loans.

Retirement plans are a great source of real estate investment funds. Many people don't even know they can use their retirement plans funds to invest in real estate, mortgages and trust deeds. Many, once they stash it away, forget they even have money in a retirement account.

Many investors think that money (or lack of money) is what stops them from closing a deal. This is not true it is a myth that holds some investors back. Understand that money is NEVER an issue - IF the deal is right, the money will come.

Simply think creatively, go to the source of funds and simply ask for money. The worst that can happen is you get a "NO". Each no only places you closer to a "YES".

The Hard MoneyLender provides you with the funds you need to quickly close on a "Hot Real Estate Investment "! Remember that it is not the "cost" of money that is important, it is the "availability" and "timing" of the funds.

Hard Money is a Sound Investment Strategy. Working together with a hard moneylender can be a win/win arrangement and will provide creative financing that might not otherwise be available from a conventional lender. You, as an investor, can catapult your growth exponentially by acquiring the cash when you need it!

Your Hard MoneyLender provides short-term private loans so you, the Investor, can buy, rehab and resell more Hot Properties!

Many provide ready access to funds which means you can purchase, repair and resell more properties with No Money Down and No Prepayment Penalties!



When a property is in foreclosure or an investment opportunity would be missed if institutional underwriting were necessary, the Hard MoneyLender can act FAST to get the funding needed to conclude the transaction!

Most hard money loans are made using the property as the primary collateral for each loan. You are not required to furnish statement of income, financial statements or income tax returns to get a loan. Your stated income and the ability to repay the loan based on your project are considered in approving you as a "Borrower".



This is one of the most overlooked form of funding. There are small companies and individual investors willing to invest in your investing projects. Many do charge high interest and points, but it is simply the availability of money, not the cost that you are looking for when you buy, rehab and resale "Flip" real estate for a profit.

We call this "OPM" Other Peoples Money! You are simply using "OPM" to profit in your real estate transaction. So does it really matter when you plan to sell for profit what it cost to borrow money? NO it does not!

We purchased a property some time ago using a hard money loan that was based upon the value of the property not the value of a credit report for $15,000, The property was worth $37,000 on the open market and we paid the lender $4,483 for a $15,000 loan. This sounds outrageous at first paying 18% interest and 8 points for a total loan pay off of $19,483.

We sold the property to another investor for $27,750 (75% below market value). We got net cash from the loan $15,802 less the purchase of $15,000 put $802 in our pocket and sold the home in 90 days for $27,750 after paying off the hard money loan and all closing cost we netted from the sale $7,434 plus the $802 we pocked from the loan a total profit of $8,236.

[Just Information]

You will find no typical transaction when it comes to hard moneylenders.


Interest rates: 10 to 18 percent
Balloon payment: typical, usually due after 1 or 2 years
Most only will want a first mortgage
Loan-to-value ratios run from 50 to 65 percent and in some cases as much as 80% under special circumstances
Points can range from 3 to 10
You will most likely have to pay the closing costs and due diligence
And commitment fees ranging from 1/3% to 1% of the loan amount
Hard moneylenders are private individuals and small local companies that operate in making loans to the desperate or needy investors the same way regular banks and brokers service traditional customers.

Hardmoney lenders look for:


A property purchase project that is clear, concise, realistic, and honest.
They do not deal in dreams but in fact and profit.
You must show them that the project is viable, limited risk, and above all you must have your profit exit Strategy clear and concise.
Most will be looking for experience in you (This can come in your displayed confidence in your project) You have to get them to believe in your abilities and your feasibility to carry out the project.
You should provide them a business plan.
You should provide them a project plan.
The more details on the property you provide the better off you will be.