In a perfect world, people would not need to borrow private hard money in California. People would have excellent credit ratings and more than enough income history to get approved by traditional lenders. But the world is far from perfect. Most of us do not have good credit ratings and don’t have the kind of income history traditional lenders like to see.
So it’s a good thing private hard money lenders exist to give people another option.
Private hard money in California is supposed to be easier to get approval for, but that does not mean that just about anyone that applies will get approved. It’s just as easy to screw up a private hard money loan application as it is a traditional bank loan.
The following tips will help keep your application from getting rejected:
• Don’t hide anything. One of the quickest ways to make sure your application is denied is for the lender to discover something that paints your application in a negative light from a source other than the borrower. So be up-front and tell them anything and everything they want to know– even if it’s bad. At least if they find out from you, you only have to answer for it and not for why you tried to hide it as well.
• Don’t be pushy. A private hard money loan is going to be approved faster than a traditional loan jut by the nature of the process alone. Following up (which is a good thing) too often or in too aggressive a manner will not help your cause.
• Don’t make claims you can’t backup. The lender is going to do its due diligence. Lofty goals are nice to shoot for, but your lender is going to want to see that you can keep expectations realistic.
• Do what you say you are going to do. Lenders and investors need to believe in you. Lie, act in a dishonest manner or fail to follow through on something and your integrity will come into question.
• Don’t shop around too much. Doing so will eventually get lenders wondering if there is something wrong and if they should trust you.
• Seek out an experienced, local lender. A qualified lender is going to have a track record of success you can verify and possibly even some insight that can help you out in the long run. A local one is going to be more apt to fund you since they are invested in the community and will like seeing their money at work.
When seeking private hard money in California keep in mind one thing—there are rules, and then there aren’t rules. While there are regulations involved in hard money lending, it is also private. So while there are rules to follow, since the lender is a private entity they essentially make up their own rules. Be aware of them, be flexible, and be ready to adjust, if necessary.
About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.
Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.