The topic of hard money and how it works, is frequently a point of discussion when talking about private financing. First, hard money is frequently called private money.

Below you will find a discussion about the policies of San Diego hard money, and the details of obtaining construction loans, purchase transactions, refinance loans and the overall procedures pertaining to a hard money loan.

Typical ideas associated with a private money loan must be explained. The private loan must have a low LTV (loan to value) ratio. This is due to the basis of the loan being weighed upon the equity available for the property being promised as collateral.

Typically loans are written at 65% LTV and under. This would require that the loan amount, in comparison to the value, be under 65%. In addition, the property must be in marketable condition. Investors and private lenders may consider a property in a less marketable area as long as the LTV was low enough to offset the risk of lending the money.

In addition, the ability of the borrower to repay the loan must be shown. These loans are justified by the borrower’s capacity for repaying the loan and the presence of strong collateral.

Rates, fees and terms will vary greatly depending on the transaction.

As a general rule, the rates are usually anywhere from 9 to 15% according to the risk of the loan, the type of property being used for collateral and the lien position. Unlike a bank loan, the terms for this type average from 1 to 3 years. However, the fees are double or even four times the fees charged for a typical loan.

Now that general guidelines have been established it is important to understand some of the varying information regarding the different types of transactions.

1. Purchase Transactions – When structuring these types of loans, the lender will scrutinize the purchase agreement and the appraisal for the property in question. The appraisal will be the basis for value and the purchase agreement will determine the market and subsequently create a foundation for the transaction.

The amount of the loan, as well as the LTV, will be decided by using the appraised value or the purchase price, whichever is lower. This follows the theory that price determines the true value. The price is usually an arms-length agreement between a buyer and seller. Lenders will use this as a general model barring of course situations where true value is significantly higher that agreed price. If this is the case then a lender would usually need proof from the borrower that there is actually additional equity available upon purchasing the property.

Another way that purchase loans differ from typical transactions is the borrower must set aside the down payment and fees into an escrow account.

2. Refinance Loans – As opposed to a purchase loan, the investor will focus heavily on the appraisal, title which would show any existing liens, and the desired loan amount. These are the primary concerns of an investor funding a refinance loan. Refinance loans differ from purchase transactions because the fees are being financed in to the amount borrowed. Meaning that the fees are combined with the amount being borrowed after the payoff of current loans and any cash out.

3. Development/Construction Loans – These types of loans have three distinct features. First, the LTV is often based off of a future value. Secondly, there is typically a draw schedule that mandates how funds are distributed.

And last but not least, an account called an interest reserve account is opened for the money to be deposited for repayment during construction. This is what makes a development loan different than other private money loans.

When seeking a hard money loan you will have to provide documentation that is typical for these type of loans and possibly more detailed documentation contingent upon your situation. The typical documentation would be bank statements, title policy, income documentation, appraisal, borrower’s credit report and the borrower’s application.

Detailed documentation can include a draw schedule, purchase agreement, construction breakdown and the executive summary. Depending upon how complex the loan is going to be, it can take anywhere from 7 to– days for a typical private money loan.

Ideally, you conceptually understand what it is required to get a San Diego hard money loan. After all, this is the best way to get the money you need in a short time for a non-traditional project.

Finally! The whole unbiased truth about San Diego Private Money Lending exposed. You owe it to yourself to get the facts today by visiting San Diego California Hard Money and San Diego Private Money Lending.

Have you thought of creative financing?

You will love Alan Cowgill’s program on finding private lenders. While Alan was a special guest on my “Investing with the Stars” I had to give you the heads up all about it. For info on my Series, go to www.investingwiththestars.net/season3.

One of the strategies I use is Wholesaling houses and this has proven to be a quick money spinner for people in the real estate investing market. People all over are using creative financing to buy properties and then selling them quickly to make a large profit within the space of a couple of days. The great thing about creative financing is that you rarely need to put in a lot of your own money to buy a house, and you can quickly build up your income through wholesaling.

The best way to fund your deals is from private lenders, not the banks! Real estate investing has become a reality for thousands of people with little or no money. Imagine being able to buy a house for little or none of your own money and then selling it on to make a profit. This is exactly what having a private money lenders can do for you. This is a easier way to do real estate investing.

In order to find private lenders, all you need to do is a little bit of research to find people that are willing to lend you money and get a higher percentage than the bank’s will give to them.

When you use private lenders for your financing, you will have put little money down to purchase the home, and then you sell it on for a higher price and make an instant profit. Wholesaling houses has helped people to make money quickly and easily, and is a great way to start real estate investing. For more information on this go to: www.investingwiththestars.net/alan.htm

There are some decided differences between fixing up your own home and a property you plan to rent out. One of those differences is often your budget for repairs. If you want to make a profit on your investment property, repairs must be kept to a minimum.

Since repairs are also a necessity to attracting and maintaining quality renters, it is also important to learn how to make repairs on a limited budget. The good news is that there are some repairs and improvements which can be made to your property without spending a lot of money.

First, make a point to go through the house and replace all of the older and outdated switch plates. New switch plates need not be an expensive investment. In fact, most switch plates can be replaced for just a couple of dollars each, at the most. You can easily replace all of the switch plates in a property for around $20.

In some areas, you may wish to go ahead and ante up for switch plates which are slightly nicer, such as in the living room and foyer. You will pay a couple of dollars more for brass plates; however, even at around $5 each, that is still not much money to pay for an improvement that can really make your rental property stand out.

Also doors are an area where you can make a big difference in your rental property without spending a ton of money. Doors are one of the first things that a prospective renter will notice so it can really be a worthy investment to make when you are trying to attract quality renters.

When you are changing out the doors, be sure to also consider changing out the handles as well. Older door handles can really make a place look drab. For just a few dollars, you can easily replace those old handles with brass finished models. S handles are popular for bedroom doors and bathroom doors and only run a little bit more.

Another area where you can make a big impact for not much money is the trim. Take a good look at the trim in your rental property. If it appears worn and cracked, it could be time to replace it. You do not necessarily need to spring for crown molding throughout the entire property; however, adding it to the entryway or the living room can really add to the value.

You might also wish to focus some attention is the entryway or foyer. Keep in mind that once prospective renters step through the front door this is the first area they are going to see, so you want to make sure you make a good first impression. Tiling it can be a great way to do that. For a small foyer area measuring around 8×8 you can easily tile it for less than $100.

Keep in mind that kitchens are one of the most important areas for most people when they view a property for rent, especially women. While it may not be practical to replace all of the cabinets, it can certainly help to paint them. Consider repainting them using a semi-gloss white paint and do not forget to replace the knobs when you are finished. Even less expensive plastic knobs can breathe new life into older kitchen cabinets very quickly.

If the thought of profiting greatly in the wide world of real estate investing excites you, then you ought download Davids free guide and Free Real Estate Course. To find out the quickest and best profitable methods visit Davids website Real Estate Investing.

People move houses 5 to 7 times, on average, during their lifetimes according to National Statistics. This translates to you moving houses at least once in a span of 5 to 10 years. You might want to move to a different home because of your changing needs or you are entering a new phase in your life.

Fortunately, there are a number of different types of homes that can meet your needs at any stage of life; from the simple condominium for newlyweds to the spacious townhouse fit for a family, you have a variety of styles and floorplans to choose from. However, the first step towards finding the best match for you is to understand what each different type of home offers.

Condominiums: Condos grew popular because of people’s desire to live in cities without spending a lot for a home back in the 70’s. Ilyce Glink, author of the book ‘100 Questions Every Home Buyer Should Ask’ states that buying a condo does not necessarily mean you own the unit. Buying a unit in a condominium is actually investing in the condominium itself and the amenities you and your neighbors share.

Town Homes: Town homes are very similar to single-family detached homes but they are clustered together in rows and this is the reason they are sometimes referred to as ‘row homes’. Most town homes give the owner full ownership of their houses but some are part of homeowner’s associations. Homeowner’s associations oblige its members to pay monthly fees for the expenses of common amenities such as parking lots, laundry room and playgrounds.

Single-Family Houses: Single-family houses are very popular for first time homebuyers. There are a lot of styles and variations that you can choose from if you are considering to buy a single-family house. These houses can be built on one’s own lot or built within a small community. Owners of single-family houses have the sole responsibility for all expenses concerning maintenance and ownership of their house.

Mobile Homes: These homes are really portable or moveable houses. You do not need to buy land but most mobile parks charge for rent. Mobile homes have simple home amenities and are relatively more affordable than other types of homes.

Pre-fabricated Houses: Pre-fabricated houses are of higher quality and are made of more durable materials than mobile homes. Like mobile houses, pre-fabricated houses rent the land below it and can be moved from one site to another.

Knowing the pros and cons of each type of houses will help you in searching for a home and arrive at an informed decision.

Forecasting your future for the next three to five years can also help you narrow down your choices; if you have a large family and want to stay in a particular neighborhood, a single family home or townhouse may be the best fit for you. If you’re young and single and not sure where you want to live in the next 5-10 years, a condominium may be a better investment as a first time home buyer.

Whether a conventional bank loan isn’t available to you, or whether a bank is simply not willing to loan you money because of your credit history, San Diego Hard Money can prove to be extremely useful in many instances. For example, some banks will refuse to help you simply because there may be an issue with the property or collateral.

Alternatively, you may simply not be in a position to provide adequate documentation as per the banks requirements. On the other hand, perhaps you looking for a bridge loan in order to continue with other investment projects you have running. Of course, these are just a few reasons why people sometimes require Hard Money financing.

10. Bank is unwilling to accept your property as collateral

In many cases banks refuse to accept certain buildings as a form of collateral. This could of course be because it’s been rated as being below average by an appraiser, but having said that, they are often reluctant to accept buildings which are designed specifically for a certain purpose such as old age homes and even some resorts.

9. Your credit rating falls below their guideline standards

Unlike banks, private money lenders tend to focus primarily on collateral, rather than credit history.

Because private investors and lenders look heavily at the property and the amount of equity available to lien, their primary concern is the collateral and typically their secondary concern is the credit history. This is not an absolute guideline but it often happens this way.

8. The bank needs more documentation

Many self employed individuals and investors have complex tax and financial records. Frequently banks will require tax returns of the individual and any corporate entity associated with the borrower’s earnings.

Hard money lenders on the other hand, will often be willing to accept income tax returns or even bank statements, in order to determine whether or not your income is sufficient for being able to make repayments.

7. Loans for the purpose of Rehabilitating Distressed Properties

Are you working on a project where you need money to acquire and fix up a property? There may be money available for this very purpose.

In most cases, if the borrower can contribute a certain percentage of the money required, San Diego private lenders will agree to take on this type of situation.

6. People who own land but lack finance for the construction of a property

Construction loans are a common use for San Diego private financing. However, in order to qualify, the owner of the land will be required to show proof of ownership, building permits, draw schedule, construction cost break down and etcetera. Providing they can meet these requirements, then in all likelihood they will be granted financing.

5. People who require to cash out their equity on existing property for the purpose of being able to submit a cash offer on new property acquisitions.

San Diego hard money can be used to secure cash out on residential and commercial property. The typical closing time is anywhere from 7-14 days from the time a full package is received.

4. You own numerous properties that area currently financed but would like to purchase more.

In many cases, banks often have limits in places as to the number of loans an investor can have at any given time, and in this case, an investor’s best choice is to apply for private money financing.

As long as the investor can show the ability to repay future obligations with current debts they will have opportunity through private channels.

3. You require financing and you require it quickly, perhaps in order to satisfy the terms of escrow for obtaining an additional property.

Unlike banks, where loan applications can take ages to process, private lenders are for the most part able to make decisions in a fraction of the time banks take.

2. You require a bridge loan

There could be various reasons that you need a bridge loan. Those might include a loan that is getting ready to adjust or balloon, temporary cash flow challenges in a business, or maybe you need to leverage so that you can fulfill some aspect of a real estate project.

1. Time is of the essence

When time is in short supply and financing is required in a hurry, San Diego hard money can usually ensure funds are available to you within seven to fourteen days. Of course, as many will agree, this is often the chief advantage.

Deciding to invest in real estate can be one of the biggest decisions anyone makes in their lives. However by taking a little time to look into the benefits of wholesale real estate investing by sourcing low priced foreclosed homes, you can seriously increase the amount of profit your investment stands to make.

What Is Wholesale Real Estate?

Buying wholesale real estate means purchasing an investment home at a reduced price that is substantially lower than the appraise market value. Finding homes that are for sale at bargain prices is often a lot simpler than you’d think. In most cases you’ll be searching for foreclosed homes.

Properties in foreclosure are owned by sellers who simply wish to get out of the credit nightmare they’re facing. This can often mean they just want to sell their home for enough money to cover the outstanding mortgage on the property. In many cases this can lead them to selling their property for far less than the market value.

Why Should I Invest in Wholesale Real Estate?

It’s easy enough to find foreclosed homes in every state across the country. You might choose to search online listings of these properties but there are other options for finding these great investments by yourself.

Once you do find a property that you think might make a good investment, you need to act relatively quickly as that home may already be on its way to court auction. This means you might have missed the lower priced pre-foreclosure option. If the home goes to auction then other investors will be bidding against you which could drive the prices up and reduce the profit in your investment.

How Do I Find Wholesale Real Estate?

It’s possible to find homes in foreclosure all over the country. There are dedicated listings for people looking to buy foreclosed properties, but there are also other ways you can learn to source your future investments on your own.

There are three stages of foreclosure you need to watch for. Homes in pre-foreclosure are often available at more reduced prices than those that have already been listed as for sale at court auction. If the foreclosed home you’re considering is already going to auction then you may find other investors bidding against you, which can increase the price. The third stage is when the bank has already taken possession of the property and is selling it to recoup costs incurred during the repossession and foreclosure process.

Should I Buy Lots Of Foreclosed Homes?

The most important part of any investment is understanding the numbers behind the deal. Just because a bank is foreclosing on a property doesn’t automatically mean it’s cheap. It’s also just as important to check that the property you want to buy isn’t in a state of disrepair that makes it unlivable.

After all, if you want to create an investment out of the foreclosed property you’re buying then it will either need to be able to generate rent or to generate profits by re-selling it at real market value.

So if you’re serious about turning some investment choices into a real wealth creation vehicle, then enroll in a real estate investing course now and take advantage of the opportunities that are all around you right now

If you have already heard the term reverse mortgage, it still sounds a little odd. If this is the first time you are hearing the term, it will probably sound like some kind of shady deal. Reverse mortgages are becoming more popular these days, but are they scams or are they legitimate?Is it really possible to sell your house back to the bank and still retain the deed to it? Will the bank really pay YOU the mortgage payments? Let’s review what a reverse mortgage is so these questions can be answered.

The name is somewhat misleading. A reverse mortgage is a loan that is structured like a mortgage, with YOU as the lender and the BANK as the buyer. In the U.S., homeowners wanting to initiate a reverse mortgage must be at least 62 years old, and own all or most of their home. The qualifications may differ in other countries. These backwards mortgages are usually performed through a bank or broker. The senior citizen homeowner essentially sells his or her house to the bank, in return for receiving periodic mortgage payments. Sometimes the payments can be structured as a lump sum, line of credit, or a combination of the three methods.

So what are the benefits to a reverse mortgage? First it provides a constant and dependable stream of retirement income. Many retirement plans such as 401(K) or Individual Retirement Accounts (IRA) generally increase in value, but are still tied to stock market interest rates. The amount of money they provide during retirement can vary. Social Security, Medicare, and other U.S. government programs have endangered funding, so they may not be reliable sources of income. A reverse mortgage can supplement a senior citizen’s income. The amount depends on the homeowner’s age, equity of the house, interest rate on the loan, closing fees, and a few other factors.

A common misconception about the reverse mortgage is that the bank eventually owns your house. This is not true! The deed remains in your name throughout the entire term of the process. Note that there is interest on the loan payments, but it is deferred until the loan is repaid.

The homeowner can remain living in the house during the entire term of the reverse mortgage. The loan becomes due when the homeowner moves out, or becomes deceased. At those times, the survivors/heirs can repay the loan themselves if they want to keep the house. (Repayment can also take place by selling the home to repay the loan plus the interest in full. The money paid to the homeowner as mortgage payments must be repaid to the lender when the loan becomes due.)

These odd mortgages can provide much needed financial support during retirement. It is a time when medical costs are likely to increase, so an additional source of income can really help. Use a reverse mortgage to help yourself or your aging relatives to gain the financial security in retirement that they worked so hard to achieve.