PRIVATE HARD MONEY LOANS
Private Hard Money Loans
are often utilized when: ‘time is essential’, ‘the projects or property
does not meet the criteria of conventional lenders’, ‘bad credit’,
‘bankruptcies’, ‘judgments’, ‘foreclosures’ or ‘IRS problems’.
Network of Hard Money Lenders
specialize in hard to place short-term real estate-secured loans
including commercial, construction, bridge, land acquisition,
development, raw land and other real estate related loans. Loan sizes
will range from $100,000 to No-Limit. RilCorp. Brokerage does NOT handle 1-4
family residential loans.
In order to interest a Private Hard
Money Lender in financing a project the borrower(s) must be willing to
adhere to the basics of Hard Money Lending. The term "Hard Money"
actually derived from the idea that the Project is hard to finance, not
that the Lenders are Hard to work with. Hard Money Lenders often will
take higher risks and loan money quicker to Qualified Projects than the
Conventional Lenders, at a higher rate, but the project must make
financial sense. The most important factor to a Hard Money Lender is
risk of their investment and the collateral of the project.
Hard Money Rates and Terms
Loan to Value
-Commercial Loans -LTV's usually range from 55%-65% (special circumstances up to 75%).
-Multi-Family Loans - LTV's usually range from 55%-65% (special circumstances up to 75%).
-Raw Land Loans - LTV's usually range from 35%-50% of “Quick Sale Value”.
Generally 12% and higher and with possibly “kickers”.
Range from 3-10 points at Lenders discretion.
Paid by the Borrower(s).
Third Party Reports
(i.e., appraisals, environmentals, surveys etc.)
Paid by the Borrower
Due Diligence & Commitment Fees
If necessary, may be 1/3% to 1/2% of the loan amount.
Borrower(s) must provide an Executive Summary of the Project for
initial review. The Summary must be clear, concise, realistic, and
honest. It should consist of 1 to 5 pages of details on the Project or
Property, the Borrower(s) Funding Requirements and the exit strategy.
The following information should be available upon request (if
* A "Source and Use of Funds” statement, including cash
equity involvement from the Borrower(s).
* A detailed Financial Projection of the Project.
* A detailed discussion of the background and experience
of the Borrower(s).
* Borrower(s) and Project current Financial Statements and
* Area maps.
* Site plans, building plans, a cost breakdown and color photos
of project if available.
* Appraisals, Environmental Studies, Engineering reports,
Market or Feasibility studies where available.
must NOT be insistent on terms, and leave the Lender to their own good
judgment to make the best possible offer relative to their risk in the
Commercial Real Estate & Business Finance