In part one of this two-part blog series, we went over some of the basics on how to properly request a hard money loan. Funded by private investors instead of banks, hard money loans are often requested for needs like real estate investment, construction projects or similar circumstances.

At RushFire Private Lending, we’re proud to offer hard money loans for a variety of needs, including residential investors and many others. While much of part one of our series went over documentation and developing a relationship with a hard money lender, today’s part two will review what to expect from your lender and what you can do to make sure your loan request has the best chance of being approved.

Transparency from your Lender

Transparency is important on both sides of this equation: From the lender, and from the borrower. When you work with our team at RushFire, we hold ourselves to a very high ethical standard when it comes to transparency. As a lender, we assure that all fees, the interest rate and other terms and conditions are fully disclosed before the loan closing to our clients. We work to achieve a “no surprises” relationship.

Transparency when you request a loan

As a borrower, it is important to be just as transparent. Hard money lenders typically require fewer pieces of information than other lenders, but the ones they do need are very important. You should be prepared to provide financial information such as a tax return or financial statements especially if this is the first loan request you’re making of a lender. The official documents confirming the entity you are using for the project will most likely be requested. A sales contract, comps and photos of the property you’re acquiring usually complete the package a lender needs.  In addition, be prepared to fully discuss your experience and any specific things in your history that have affected your credit like divorce or bankruptcy. Hard money lenders have much more flexibility than the bank has. Remember, the basis for a healthy long-term relationship is trust, so make sure you do everything you can to build a solid foundation.

Submitting your Documentation

Making a professional presentation of your project and loan request can speed up the loan approval process and creates the impression that your business decisions are well-thought out. An effective way to present your project and loan request is to attach an Executive Summary of the project and the loan you’re requesting. This can be a separate document or as simple as an email with a description of the project and a list of the critical elements a lender is interested in.  Be sure to include such things as: property address, sale price, construction cost, ARV, equity available, loan amount requested, construction period, exit plan, closing date required, name of the entity borrowing the money and contact information. You can attach the files listed above and that can serve as a basic loan package. Of course, you can also develop a more comprehensive document as well.

By taking the step to organize your project’s information this way, you will eliminate much of the back and forth requests for additional information. You need to move fast to close your deal. Making sure you do all you can to help your lender get up to speed on the project will help assure you can get to closing as quickly as possible.

For more on requesting hard money loans, or to learn about any of our private money lender services, speak to the staff at RushFire Private Lending today.