Hard money lenders, just like all lenders, offer numerical rates and fees that can be compared apples-to-apples. However, evaluating beyond the numbers of an investment loan can be tricky.
When comparing hard money rates and fees, don’t miss asking lenders these five key questions.
5 Questions to Ask Before Getting a Hard Money Loan
- Do you provide a detailed, itemized list of ALL closing costs?
You should expect a detailed estimate of all closing costs and fees that you sign before any real estate investment loan goes into processing. At Catalyst Funding, we also review the HUD with every customer 24 hours before closing to ensure absolutely no surprises.
- Do you look at contractor bids to ensure everything is in line, including cost accuracy and completeness before issuing a loan?
Find a lender who can offer additional oversight on home rehab projects. Ensuring you have not missed costs or underestimated timelines is especially important to maximizing your profit. At Catalyst, we will review your contractor bids and also have a list of recommended contractors who have extensive experience in house flipping and rehabbing.
- Do you help generate a detailed ARV estimate?
Find a lender who is also a property investor and knows how to accurately calculate After Repair Value. At Catalyst, we are investors ourselves and have personally completed over 200 real estate projects. Therefore, we will help ensure your ARV is spot on, along with providing the latest market data and competitive rates and fees.
- Do you require a minimum credit score?
The answer should be “no” when it comes to property investing. Hard money loan are designed to be short-term loans for investors. Therefore, the lender should be more focused on the property investment itself vs. going through your financial history with a fine-toothed comb. At Catalyst Funding, our decisions on whether or not to approve a deal are based on three simple factors: your overall depth of credit and character, your reserves and (most importantly) the merits of the deal itself.
- Do you provide any tools/resources/training to help me succeed?
Don’t settle for a lender who provides the funding and then shoves you out the door. Expect more. Look for a lender who has resources to help you along the entire investment journey.
At Catalyst, we will review your project from start to finish while sharing our knowledge and expertise — specifically when it comes to evaluating projected rehab costs, total rehab time and expected ARVs. We know these are key to your profitability, and our job is to help you succeed and make money.
Catalyst Funding is a hard money lender who can help build your real estate investment opportunities. With a background in fix and flip projects and other property investments, we can provide resources and guidance to help you through the entire process. Contact Catalyst Funding today. 832.648.3626