This is what happened.

I have a construction company that was doing work on the dentist’s son’s house (who is a doctor by the way). And the dentist saw our work and wanted us to do some things to his house as well.

He lives in Staten Island NY and we are based here in the Newark NJ area. Anyway one day the dentist tells my project manager that he was ready to buy a house that could be flipped basically.  So of course the manager told him about me and what I do.

The doctor told him to give me his number and for me to call.

Immediately I thought to myself this is going to be a waste of time because a hard money lender could go anywhere to get this done, so I didn’t call for the first week.

My project manager told me the following week that he was waiting for my call. By this time I figured well maybe he’s motivated if he keeps asking about my calling so I gave him a call.

Long story short, he seemed very anxious and motivated and he made an appointment to meet with me in Jersey.

We met up and the meeting was only for about twenty minutes. So now I’m thinking “wow, he is really motivated since he drove about a half an hour to come here only for a fifteen to twenty minute visit“.

In the meeting he informed me that he didn’t want to purchase for himself. He actually wanted me to purchase and do what I do but he would fund the deal. He was only interested in becoming a hard money lender, not an investor.

Seriously? I thought. Well I need to move quick before he changes his mind.

The following week was actually a holiday week so it took me two weeks to find a good deal for him to fund.

Then it happened.

I called and he said he would call me back but I received no returned phone call. Then I had the project manager call and he said he got no answer or return call.

So after waiting a couple of days, I decided I would call him today.

I asked if he changed his mind because my time is valuable and I don’t want to waste it if he was not serious about being a hard money lender and he hit me with “I have a pending deal with someone in Brooklyn. If it doesn’t work out I will call you back.”

For real? Did he really have me waste my time?

Because of the person I am I probably will not answer the call if that deal falls through because he already wasted like two weeks of my time already. Hard money lender or not, I have no time for games.

How crazy is it to lose a hard money lender before you even got ‘em even after he came to you?

One place is, of course, here on the net. I found a good lender for same day closings.

You know how nowadays many title companies no longer want to do simultaneous closings because of the politics going on real estate right now?

Well these guys give you the funding to close the deal, as long as you have the end buyer in place ready to close on the same day.

They do not lend money for any longer than one day, however, so you have to make sure your deal is in order.

The site is www.fastinvestormoney.com (no affiliation).

Another good site is www.njhardmoney.com (no affiliation). They provide funds for rehabs, commercial and residential deals.

They may require that you put some of your money up, at least ten percent so make sure you have your end ready to go just in case.

They also claim to give you a quick decision when you apply online.

Incredibly enough you can also get the construction loan through them after you purchase your rehab.

There are other ways of finding hard money lenders in NJ.

In the local newspaper you can check the financial section which usually advertises lenders.  You can then call and find out their criteria and how much they are lending.

Try not to settle for anything unless the deal sounds sweet.

When you purchase a loan with a bank, they require you to disclose proof of the following:

•    bank statements showing the down payment
•    paystubs
•    W’2s
•    Credit score of 620 and above

They also take from what used to be 30 to 45 days to look over the entire file of the applicant and give you an approval for closing.

Nowadays they take from 45 to 90 days to give you an approval for closing and that is no exaggeration.
However, a private hard money lender only requires the following:

•    A good property that can be sold for 35% more than the loan amount after repairs

That is it!

They do not run a credit check or ask for any financials. They base their approval on the project, not the person.
It is very wise that you already know the real estate game before getting any money from this type of lender because you need to know how much the house can sell for after repairs and how much repairs need to be done on the home.

This is because it would not make any sense to take money from a lender if it does not cover the repair cost.
What I mean by this is if a home is worth $100,000 after repairs and the private hard money lender is only going to give you $65,000. Then that $65,000 has to cover the price of the home as well as all repairs.

If it doesn’t, then you really have no deal.

Always make sure the loan amount can cover all costs.

Just a little note:  You should also try to include your three month mortgage payments into the borrowed amount as well.

With hard money lenders the criteria is not as difficult as with a regular mortgage lender. This is because each loan is structured a little differently.

Mortgage Lender:

• Property is usually owner occupied or renter occupied
• Property has to be habitable before closing
• Will loan from 97% to 80% of the purchase amount depending on the loan
• They don’t allow borrower to take more money than asking price unless it is to cover closing and very minor repairs (repairs usually no more than $5000)

Hard Money Lender:

• Property is usually vacant
• Property is assumed to be distressed
• Will loan 65% to 75% of the estimated value of home after repairs
• Can borrow enough money for repairs and even loan payments as long as it fits within above range

They also aren’t as strict when it comes to credit. However, you should have good credit and do deals with the best interest of the lender and yourself because after all, you are both in it to make money. Post

It is also wise to check around before settling for the first hard money lender you come across. This is because not all of them offer the same rates and it would be better for you to find the one with the lowest. The rates can range from 9% to 16% depending on your credit. This is also true for regular mortgage lenders, but their rates are much lower because they are backed by government programs and therefore they go by the financial APR (annual percentage rate). Their rates can be as low as 4.5% to 10%, depending on your credit scores.