Hard money loans are a great way to finance fix-and-flip projects. You need a lot of money to buy and rehab a house, and you need it quickly, but only for a short amount of time. With a hard money loan helping you out this way, you can see a very good return on your investment. But hard money loans Philadelphia… how hard are they to get?
The good news is: Not as hard as you might think! In fact, it’s surprisingly easy to get a hard money loan if you truly have a decent deal with a good projected return on that investment. You may be looking for a hard money lender, but in reality hard money lenders Philadelphia are looking for real estate investors with good deals. Here’s four tips to help you secure a hard money loan for your next project.
1. Find a good deal
If this is your first time trying to secure a hard money loan, be sure to find a really good deal. Find that house at a low price with the kind of repairs and renovations that you can do well on a tight budget and then flip for a great return on your investment. You want to show the hard money lender that your business is all about making highly profitable flips. You may need to look at a lot of properties before finding the right one but that’s okay. The effort you put in up-front will help to speed up the process and will make your investing far easier.
2. Be professional when applying for hard money loans Philadelphia
It’s really important that you do solid work on coming up with your projected After Repair Value (ARV). Prepare a report showing comparable house sales which justify your ARV. Include pictures of the house. Give a one page summary of your overall fix-and-flip plan, but also include a very detailed (and lengthy) expense report covering all the repairs and renovations you plan to do. Again, the amount of work you do up-front will not only help you increase the likelihood of getting a loan, it will also help you to actually do the work and stick your budget. Being detailed and precise up-front will ensure you maximize your potential return.
3. Be prepared to talk about yourself and your investment in the project
Your experience as a real estate investor, the number of homes you’ve previously flipped and your reputation in the field will come into play while negotiating the loan. So be prepared to talk about yourself and show the lender how you’ve succeeded in previous projects. Also be ready to talk about how much money you’re putting into this project and where it’s coming from. How much labor are you putting into this flip? The lender will want to know about your stake in the project and it will be better to present that clearly rather than be asked about it.
4. Be diligent
Hard money loans Philadelphia are being given to those real estate investors who show they will complete their fix-and-flip on schedule and repay the loan as planned. If your lender calls asking for more information, be sure to get it back to them quickly. You’re developing a reputation with this lender and if you want another loan after this one, you’ll want to be diligent and do everything you can to impress them.
It’s not hard to get hard money loans Philadelphia. Just be sure to find a good deal and be professional when applying. Be ready to confidently talk about your experience and how you will complete the project. And always be diligent in getting back to your lender. If you do this well, it won’t be so hard when you apply for your next hard money loan.