There are just too many situations which make you have to end up with residential hard money lenders. The up and down of the real estate market have made the lending environment changed drastically according to the current situation. Lenders become more careful in making decisions which means the requirements will become tighter. The amount of people who get rejected for the loan will be increased which make them have to start seeking for other source of loan which can provide the fund they need with their current condition. Hard money lender becomes one of the best alternatives in this condition even though many people scared of dealing with them because of the compromises they have to make when dealing with hard money lender.
The most important thing that you have to consider when you are dealing with hard money lender is that you have to make sure that you get a lender who understand your situation and able to provide the best solution for the problem which possibly occur. Good residential hard money lenders usually won’t ask for tax return and providing loan based on the After Repair Value while other lender provide it based on the Purchase Price. In fact, hard money lender can be better than conventional lender in some situations.
As an example, conventional lender will ask for certain percentage of down payment even if you buy the property in a very big discounted price. The after repair value will also be considered in the transaction if you are dealing with residential hard money lender whereas the regular lender will exclude it. Contrary to popular belief, residential hard money lenders is a good loan source which should be considered by real estate investors when they are using low risk and maximum return of investment as the top priority with the easy qualification and flexible transaction process.