What is the difference between a Hard Money Lender and Traditional Bank Loans?
Traditional banks generally have many more guidelines. Their lending criteria and red tape make it difficult to borrow money quickly. When a deal comes up and you have to move fast traditional banks typically just can’t move fast enough. Hard Money lenders that specialize in “fix and flip” loans are usually able to get these deals done quickly because that is what they do. While Hard Money loans cost more than a typical bank loan they can enable you to buy more properties, leverage your own cash and make more money.
What are your rates and fees?
Our rates and fees will vary depending on the quality of the deal and your personal financial situation. The interest rate will generally range between 12% and 14% and the origination fees will range from 3% to 4%.
What is term of your loans?
Our loans range from one day, for transactional funding, to 12 months for most of our fix and flip loans. We will consider longer term loans on a case by case basis.
What makes you guys different from other Hard Money Lenders?
We are rehabbers and lenders. We do what you do every day. We know what it takes for you to be successful. We have sat on both sides of the table as borrowers and lenders. We have lived through good markets and bad markets. Whether you are buying or selling we know what it takes to make a deal work. We have a perspective that few others have. We can help you evaluate a deal, advise you along the way and are glad to share our vast experience to help you be more successful. When you run into issues on a project, need advice or a second set of eyes, would you rather turn to just a banker or to someone that can also provide expertise and advice on the market and rehab side as well.
Are there any fees that are paid up front?
We do not have any application or commitment fees, but we do have an appraisal and loan processing fee of $595.00. This fee covers the cost of the required appraisal that we will order. This fee also covers any additional credit and/or background screening.
How do I know how much to pay for a property?
The amount you pay for a property is up to you as a private investor, but we recommend that you pay no more than 65-70% of After Repaired Value (ARV), minus the cost to repair the property.
How much can I borrow?
This will vary depending on the quality of the deal, the experience of the borrower and their personal financial situation. We will typically loan 80% - 90% of the total project cost (purchase price plus repairs).
How do you finance the repairs?
We generally escrow 100% of the repair costs at closing and reimburse for repairs as they are completed. You only pay interest on the repair money when you use it.
What are your credit requirements?
We will look at your credit history, however it is only one aspect of the approval process. We are much more concerned with the property itself and the amount of cash you have available to handle the project. We do not have a minimum credit score requirement. However, we will look at your credit score as part of our evaluation.
How much available cash will I need to qualify?
It depends on the size of the deal, but a good rule of thumb is 12 months’ worth of payments plus one-third of the cost of repairs.
Do I need a lot of experience to qualify for a loan?
Not necessarily. Having experience is very helpful but we do lend to people with little experience. This is one area where the team at Absolute Capital Lending can add a lot of value to deals that we finance. Over the past 10 years we have purchased, rehabbed and sold hundreds of properties ourselves and coached/mentored new investors on hundreds more. We help you succeed by sharing our experience in valuing properties, determining repair costs, buying materials, managing contractors, and navigating through the perils and pitfalls of this business. Where else can you get competitive lending rates and access to the expertise of some of the most experienced rehabbers in the northeast!
How do I start?
Fill out our on-line pre-qualification form, email us a basic deal summary or give us a call. We will review the information and get back to you to discuss the deal and the process.
Do you lend to individuals?
No, we only lend to legal entities. Most commonly this will be an LLC or Corporation
Do you require personal guarantees of the principals?
Can we live in the house while we rehab it?
No, we only lend to investors and not owner/occupiers
Will you take a 2nd mortgage on a loan?
No, we only do first mortgages
Do you offer new construction financing?
Yes, but only to experienced contractors or builders.
Are you a direct lender?
We are a direct lender with control of our own funds. All decisions are made in-house. No loan committees or red tape.
How soon can I expect a preliminary approval from Absolute Capital Lending?
Within 24 hours if the submission is complete.
Do you offer better rates and terms for return borrowers?
Of course. After two successful loans the rates and terms can be reduced assuming the circumstances of the next loan are substantially similar to the first two loans.
What income requirements do you have?
We do not have set income requirements for the borrower, but the borrower must be able to demonstrate the ability to pay scheduled interest.
I like what you do. Do you also borrow money from individuals?
Yes. We are always looking for Investors. We offer very attractive investment opportunities. Please call us at 973-659-0007 to discuss this further.