I would like to thank my good buddy Jay for updating me on Private Lending Terms. I will provide more info and other resources on Private, Hard, Rehab Money in the future.

Marki,

Here is some information on Private Money for Investors.

Private Lenders: 

Definition: Private investors seeking alternatives to the stock and bond markets looking to find refuge in the world of private lending for the purchase and rehab of real property. (Also known as hard money lending.)

Throughout the years, private (hard) money has taken on many different looks and corporate structures. Unfortunately if you were in the private money business during the past decade, whatever your corporate structure was, you're probably in the property management business now. So many hard money investors got caught in the value collapse and had to take the properties back from their borrowers.

Today's private lenders, having learned the lessons of the last ten years have raised the bar from a qualifying perspective. Gone are the day's of you want it you got it. Hard money is being underwritten with an eye for detail, and while it is available in abundance, investors are requiring that the borrower meet specific guidelines. The guidelines are different for each private lender. The guidelines are documented and exist to protect the private lender's cash investment.

Be sure you are working with the best that rehab lending has to offer. Call The Rehabman  (312) 401-5626.

Private Lending Terms:

Rehabman works with several private lending investors. Like their counterparts in the Freddie and Fannie world, their terms and conditions vary depending on the borrower, the property, and the type of exit out of the hard money loan that's available to the borrower.

None exceed a 65% loan to value. Discount points range from four to ten percent on the total loan amount (purchase plus rehab). Interest rates vary from 10% to 15%. Down payments ranges are from zero (100% financing) to a twenty percent down payment program. Again the terms depend on the borrower, the property and the exit.

The Exit Strategy: 

In Many ways this is the most important aspect of any investor purchase. Without a specifically well documented, properly underwritten exit strategy, the private money loan cannot be funded. This is where the borrower pays off the private funder and moves on to their next purchase.

Exit strategies can be anything from a refinance to having a buyer ready once the rehab is complete. A well documented solid exit strategy will afford the borrower the best terms available  from the private lender.

In today's private lending both the borrower's initial purchase with the private money and their exit strategy must be properly documented and underwritten in order to fund the transaction.

The Rehabman has been documenting and underwriting our clients rehab loans for over fifteen years. 

As with our FHA and conventional rehab business we will not move forward with our client without knowing we can fund the loan.

Be sure you are working with the best that rehab lending has to offer. Call The Rehabman  (312) 401-5626.