When putting together your own list of the Top 10 hard money lenders Philadelphia, there are some lenders you should watch out for that should definitely not make it onto your list. Leveraging your capital to do more deals is an excellent strategy for scaling your real estate investing business. But it does require working with lenders that you can count on, and preferably lenders who are interested in doing many deals with you, not just making a lot a money off of you from a one-time loan.
You’ll want to get referrals from other real estate investors. Meet and talk with lenders at real estate investment association (REIA) meetings. Check our hard money lenders online. Put some work into your list of hard money lenders you might want to work with in Philadelphia. As you do that, here are a few warning signs.
Watch out for these problems and warning signs…
Lenders charging hidden fees
If you’re just about to sign off on a loan and suddenly all kinds of hidden fees are showing up you should be concerned. I’m not saying there’s a problem with charging fees, but not telling a client upfront or during the application process about what costs are involved is not fair to the client.
Unknown lenders (no reputation)
Reputable lenders will show up in an online search—just googled “Legacy Capital” and it comes up with a 5-star rating from Google. What if a lender doesn’t have a website yet? Ask other real estate investors about them. If no one has heard of this lender, they don’t have a website, you can’t find out about their lending history, and you can’t verify their physical address, something is wrong.
Lenders wanting a piece of the pie
Your Top 10 Hard Money Lenders Philadelphia shouldn’t need to include any lenders looking for a percentage of the profit from your flip. There are plenty of lenders who will charge interest, points and origination fees without demanding a percentage of your profit. It’s like they’re trying to get the benefit of being your business partner without any of the obligations that a partnership would entail.
Lenders lacking funds
Hard money lenders typically raise capital from investors to be able fund loans. If a lender is needing more time to fund your loan or is unable to follow through on scheduled draws, you may be dealing with a lender who has lost a major investor or has allocated too much funding to projects that have gone south.
A lack of experience
Some hard money lenders became hard money lenders because they took a course or hired a guru to help them make more money. Make sure that your lenders are actively involved in real estate and doing deals themselves. Why? Because a bad lender will lend money on any deal but a good lender should be able to look at your deal and say: “that deal is great” or “that deal is not great… and here’s how to make it better.”
What about Legacy Capital?
Legacy Capital discloses the fees and costs in your loan application package. You can find out more about our company, our principals and our history on our website. Legacy Capital is a lender interested in your success as a real estate investor. We’re interested in helping you grow your business not just in extending a single loan to you. We hope you’ll give Legacy Capital the chance to earn a spot on your list of the Top 10 Hard Money Lenders Philadelphia.