Residential Hard Money lenders are often the helping hand that first time home buyers or first time developers need. Yet, many first time borrowers seem to be a little uneasy about what happens after they receive their hard money financing when they should not be; therefore, let us go over what happens after your lender approves you.
Despite, what most people think most residential hard money lenders want their borrowers to get approved and succeed. Thus, many residential hard money lender are often shocked when potential borrowers approach the situation in an adversarial manner. Your lender, in fact, is actually someone to keep in touch with throughout the entire approval process—so do not be shy.
After receiving your financing, you really do not have any time to waste wondering what your lender is or is not up to—you need to act quickly and move forward with your investment. Remember, you more than likely spent weeks doing your due diligence and research before deciding on a lender. Moreover, you took the time to go over everything in your loan agreement and spoke with an attorney, so now it is time to make your purchase. Of course, your purchase will include covering any closing costs or additional fees, but once again, you were clear on all of this because you choose a reputable lender who operates with a high level of transparency.
Therefore, you are on to the next step, which is insuring your property. Property insurance is often a must-have for hard money lenders, so if you do not know where to get the best deal then ask your lender for some assistance. If you do know where to get a decent deal on property insurance then secure your insurance. In other words, you do not have to wait for approval from your hard money lender on this—but they are here to help should you need it. After you are insured, really all that is left to do is follow your business plan and/or construction timeline.
How to Manage your Residental Hard Money Loan
So now that you know, your lender is truly here to help, let us go over how to manage your hard money loan. Unsurprisingly, any lender of hard money financing has an expectation of repayment. Moreover, lenders will expect you pay off your loan sooner rather than later (they also expect you make a lump sum payment with interest if you are flipping the property). This means having projections on when your residential property will become profitable so you and your lender have a better understanding of repayment timeframe. Clearly, with higher interest rates, you should also expect to pay off your loan quickly. This is why it is so important to review your loan terms and repayment options.
A True Helping Hand
Ultimately, residential hard money financing is always a viable option if you are prepared and are willing to work with your lender not against them. Thus, to recap, there is no need to look at your lender as the enemy if you have done your due diligence in selecting them. Lastly, the more prepared you for the lending process, the more streamlined the repayment process will be.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About 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.