There seems to be a shroud of mystery involving Hard Money. I mean, there are people that argue over the difference between Hard money and Private Money. (Mind you, they are the very same thing). It is this confusion that can downright scare some investors right out of even entertaining the idea... One of our core values at Glassridge is authenticity. What you see is what you get, with no misleading claims or deceptive fine print and this not only applies to our personal lifestlye, but also translates into our business practices as I intend to further reveal with this candid and brutally honest report.
Hard-money lenders do not rely on the creditworthiness of the borrower. Instead, they look to the value of the property. The lender wants to make sure that if the borrower defaults, there will be sufficient equity in the property over and above the amount of the loan. Accordingly, you will not get a hard money loan of 80 or 90 percent loan to value; typically, they will range from 50 to 70 percent loan to value.
I receive calls everyday from investors requesting a Hard Money loan to finance a real estate deal through Glassridge and more often than not, unfortunately I have to tell them that the answer is no. Those investors with little or no experience tend to make the same mistakes, and in this countdown to the number one reason, I will explain. (more…)