Hard money lending can be a great way to accomplish some projects, but what makes a good hard money lender? How can these loans go wrong? Brenda will enlighten us in this matter.

We look for different things, for the shorter term ones, we just want to make sure that you have an exit strategy. And if it's a flip, we want to know what the as is value is, because that's what we're basing our loan on. And then we can add a construction loan on top. So what is your scope of work, who you're working with, do you need to get permits, how long does it take to get permits, whether you've had experience with this type of project, because it's important for us that you succeed, and then also the after repair value. So if you're selling it, we'd like to see that borrowers have an idea of what properties are going for, and that the same sort of condition or square footage you have is similar as possible to the the subject property for comps. And experience matters a lot.

Mostly it's either the As Is value comes back low which we, as a lender, we say it's always, you know, 80% or X percent of the purchase price or that percentage of the As Is value. Sometimes the property value comes back low, and then the investor at that point will need to decide, even if the appraisal comes back low, Do I still want to move forward on it? And sometimes they don't, and they find another property. I think that's good to catch ahead of time, whether they find issues with the properties before the loan closes, and we're doing our due diligence as well. We've caught some things that unfortunately, the deals didn't go through. They also didn't have to go through with the project, which they might have lost money on as well.