If you’re a real estate investor in Pennsylvania and you’re looking to do deals, perhaps you’ve encountered the same challenge that many other investors experience: you need capital to do more deals. Maybe you can do one or two on your own, or maybe you want to scale up in a big way… you need the funds to do it.
That’s where a hard money loan from a local lender can help you. However, not all of them are created equal so here are 4 things you need to know so you can get a loan from the best residential hard money lenders in PA for your situation…
#1. Banks Are Built To Be Risk Averse. Residential Hard Money Lenders In PA Fill The Gap.
Banks and private hard money lenders are very different. Banks are built to be risk averse and not entrepreneurial at all, which is why they tend to often only give mortgages to homeowners who are buying a primary residence.
However, hard money lenders are specifically designed to be entrepreneurial and to provide hard money loans to investors who are looking to acquire and rehab a property that they don’t intend to make their primary residence.
#2. Investors Find A House And Work With Residential Hard Money Lenders In PA To Acquire And Fix
Although the exact process may differ from one lender to another, and based on a variety of investor needs, the typical process is that investors narrow down their search to find a short list (or even just one) property that they intend to acquire, and then they work with one of their chosen residential hard money lenders in PA to acquire and rehab the property.
For this reason, it’s always recommended that investors first build a relationship with lenders before starting their search, in order to expedite the due diligence and lending process when they have a property they want to move forward with.
#3. Many Factors Are Taken Into Consideration To Determine Whether To Lend, And How Much
While banks often only look at your credit score and how much down payment you have available, residential hard money lenders in PA consider other factors to determine whether or not they can lend to you.
Some lenders may take your credit score into consideration; others may not. One of the biggest factors is your plan with the property—how you plan to acquire the property, how you plan to rehab it, and what your return on investment is estimated to be.
#4. Many Different Kinds Of Residential Hard Money Lenders In PA
Here’s the biggest surprise to investors who are learning how this all works: there are different kinds of residential hard money lender in PA. Some have lending limits; some have specific areas they will or won’t invest in; some have limits to the number of units a property can have (i.e. 5 and under); some are focused only on the money while others are lenders who can offer added value through consultation and recommendations.
Summary
If you want to do more deals and scale up, one of the best things you can do is build a relationship with residential hard money lenders in PA and make them your allies as you invest in more deals.