3 Things an Investor Must Know About Hard Money Rehab Loans in Dallas Fort Worth Metroplex
Admin - Sep 22, 2016
Today, many real estate investors prefer hard money rehab loans in Dallas Forth Worth Metroplex over the bank loans. Hard money rehab loans help an investor to remodel his property so that he can sell it for a profit afterwards. As an added bonus, this loan category allows an investor to get his project funded quickly, without making him worrying over the credit score or big bank lending hassles. If you’re thinking to get hard money rehab loans in DFW Metroplex, Texas, here are the essential things you must know.
Best for Experienced Real Estate Investors:
Most hard money lenders like to deal with experienced real estate investors as it’s just too high of a risk with the novice. This is because the lender funds on the basis of the project potential success rather than just creditworthiness. Besides, your financial strength as collateral, cash and stocks, experience and the right team can convince a lender to approve your hard money loan. In short, the experience of the investor with successful track record assures lender of his loan payoff ability.
After Repair Value Does Matter:
Since home rehab loans are opted for the home improvement to make the property sell quicker, a lender likes to know about the value of the home after repairs. ARV (After Repair Value) is the estimated value of the property after an investor has renovated the property. A good ARV with a lower LTV (Loan to Value) may persuade the lender to finance up to 60-70 percent of the total amount you require to flip the home. With some skin in the game from you, Hard money lenders may be willing to include purchase price, rehab costs and closing costs.
However, some lenders may close the loan on the current value or purchase price of the property and not include any remodeling funds.
Lender Wants Borrower’s Skin in the Game:
Hard money lenders are not typically able to grant 100% financing of the total cost as they want investor should has some skin in the game with sufficient amount of his own equity in the project. To learn more about ways to have skin in and obtain up to 100% investor financing click here to watch video. A borrower may be inexperienced or not financially secure, making him fail to pay back the loan. As a result, a lender has to go through lot of extra work, stress and potential financial losses. Hard Money Lenders require investor to have skin in project so that they are confident the borrower will see the project through to the end.
Loans 4 Investors offers hard money rehab loans in Dallas Fort Worth, Texas. We are the hard money lenders based in Texas and specialize in hard money loans including fix and flips, build spec, cash out refinance and landlord acquisition loans. Apart from Texas, we cater to the funding needs of real estate investors in Oklahoma, Arkansas, Mississippi, and Tennessee.