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The best hard money lenders: a 9-point checklist
The best hard money lender is the one that funds your deal on time, at a total cost that still leaves you a profit. Use this checklist to compare.
Get my termsHouston hard money lenderWhat makes a hard money lender the best?
The best hard money lenders fund a high share of the purchase and rehab, close fast, pay rehab draws quickly, quote clear terms in writing, and know your local market. The lowest rate is not always the best deal: a lender that funds more of the deal can leave you more cash for the next flip.
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Estimate only. Loan amount is the lower of 100% of purchase plus rehab or 70% of the sale price when finished (after-repair value). Minimum loan $150,000. Business-purpose loans on investment property.
The 9-point checklist
- Leverage: % of purchase and rehab funded
- ARV cap: the maximum loan to after-repair value
- Speed: days from contract to closing
- Draw speed: how fast rehab money is released
- Total cost: rate, points and every fee
- Written terms before you pay anything
- Direct lender vs broker
- Local knowledge of values and neighborhoods
- Track record: reviews and references
Questions to ask a hard money lender
- How much of the purchase and rehab will you fund on this deal?
- What is the maximum loan to ARV?
- What are the rate, points and all fees?
- How do rehab draws work and how fast are they paid?
- What happens if the flip runs long?
How we answer them
| Question | Houston Private Money |
|---|---|
| Purchase funded | 100% |
| Rehab funded | 100% |
| ARV cap | 70% |
| Close | About 5 days |
| Minimum loan | $150,000 |
Questions investors ask
Straight answers about best hard money lenders.
How do I find the best hard money lender?
Compare leverage, ARV cap, speed, draw process, total cost and local knowledge, and get written terms before paying any fee.
Is the cheapest hard money lender the best?
Not always. A lender that funds more of the deal can save you more cash than a slightly lower rate.
Should I use a local hard money lender?
A local lender knows values and neighborhoods, which helps on ARV and speed.
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