Top 5 Tips to Choose the Best Hard Money Lender in the Washington, DC Area

Over the years, hard money loans have emerged as an effective financing alternative among real estate investors and business owners in the Washington, DC area. If a bank has deemed you unqualified for a loan because of a low credit rating or for other reasons, hard money lenders in Virginia, Maryland, and DC may be the answer to funding your project quickly and efficiently. Choosing the right lender, however, can be a daunting task, considering the fact that you have to take into account a number of factors before making a final decision. Add to that, there are a plethora of hard money lenders in Maryland, Virginia and DC flooding the market today.

By carefully selecting the ideal hard money lender, you can rest assured that you are that much closer to funding your real estate investment deal. Many real estate investors are finding it increasingly difficult to obtain loans from banks due to various reasons, such as insufficient down payment or poor condition of the target property. Private, or hard money, lenders factor the loan amount based on the asset's value itself and do not base as much weight on borrower credit rating as banks do.

Finding the right hard money lender requires extensive online research or a vetted recommendation from an industry expert. In today's fast-paced business world, time is a precious resource and there is little time to comb through the multitude of lenders out there.

Our five tips will help you select the right hard money lender to partner with on your fix and flip:

  • Assess your money needs. It goes without saying, that before you choose any hard money lender, it is best that you determine your hard money needs and requirements. There are a number of loan types that are available for hard money financings – such as bridge loans and acquisition loans – and it's important to know what financing option is best for your particular situation.
  • Knowledge is power. When it comes to choosing the right hard money lender, you need to make sure that they are qualified and knowledgeable in the industry. Moreover, you increase the benefit and chances of a profitable fix and flip if you team up with a hard money lender who has extensive building and development experience. In case you run into a development snag, the lender will be able to provide quality insight and helpful recommendations on how to keep the rehab project moving.
  • Responsiveness. Let's face it, hard money loans can be very complicated and difficult to properly structure, so it is vital that you work with a hard money lender that has a proven track record and can answer questions you have in a timely manner. You should have a contact at the lending company that can provide guidance on matters along with your lending journey – from property acquisition to the sale of your newly rehabbed fixer-upper.
  • Transparency. One of the major factors that you need to consider before choosing a hard money lender is transparency. The term sheet, contracts, and closing documents should have all fees and payment schedules listed so there are no surprises.
  • References. Before choosing a hard money lender, make sure that you ask for past client references and customer reviews. This will give you a sense of their business model and customer satisfaction level.
  • These are just some of the tips for choosing a hard money lender. There are many others factors to consider, such as reasonable terms and finance rates, availability of funds, and quick turnaround time. Partnering with a reputable and knowledgeable private lender will help lay the foundation for a successful and profitable fix and flip venture.

    Bobby Montagne Photo Walnut Street Finance helps builders and developers to get real estate hard money lenders services in the Washington, D.C., Maryland and Northern Virginia.

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