Getting your deals DONE means understanding the KEY
INGREDIENTS of private hard money funding.
It's like baking a cake. You can't leave any of
the ingredients out, or it just FALLS FLAT.
When it comes to private hard money loans, one
of the KEY INGREDIENTS is LTV (loan to value).
It may be the most mis-understood term of all when
it comes to private hard money funding.
Private hard money lenders contact us every day and
here's how one of the lenders describes it:
"Hard money lenders are most concerned with
Loan-to-Value or LTV ratio and typically lend a
maximum of 60-65% of the value of the property.
Value is defined as 'today's sales price, the amount a
hard money lender could expect to realize from
the sale of the loan collateral/property in the
event that the borrower defaults and the
property would be sold in a 1-4 months' time.
This 'value' differs from an MAI appraised value."
Note the VALUE is a price the lender would feel
comfortable with if the borrower defaulted and they had to
sell the property within 1-4 months time. So,
they lend 60%-65% of THAT value, which means you
need to find properties with LOW LTV.
So, you find a property that has a QSV of $200,000.
The lender will loan you 60% to 65% of that VALUE,
which in this example woud be $120,000 to $140,000.
Notice that is not the "appraised value". "Appraised values"
are sometimes significantly higher. The same property
may have an "appraised value" of $250,000 based
on comps. Knock of 20% of the "appraised value" to
arrive at the QSV (quick sale value). In other words,
at that price the property would easily sell within
1-4 months.
The GOOD NEWS is that there are PLENTY of those
GREAT LOW LTV properties available. And you can
be making great profits by concentrating on those
properties.
When you're not doing it this way, you are swimming
upstream. Instead, buy RIGHT. You LOCK IN profits
when you BUY not when you SELL. Your deals are easier to
fund because they have LESS RISK. The properties
move faster on the market. They attract more interest
from homebuyers because you don't have to ask for
"TOP DOLLAR" to make money. Buyer's are able to
get better loans from conventional mortgage lenders who
get the LTV they are looking for. The buyer gets
a better interest rate. And because the LTV is
LOW, the lender may not mind if you do a partial
"seller carry back" because the combined
LTV is still low. Many investors have become
VERY WEALTHY holding seller financed notes, that
they can also use to CROSS-COLLATERALIZE other
private hard money deals and put "skin in the game"
that way, instead of cash.
You just have FAR MORE flexibility when you
PAY ATTENTION to the FUNDAMENTAL of LOW LTV.
Private hard money lenders care little about your
credit rating. Many of them don't even care if you've
been bankrupt or had a foreclosure. But they DO CARE
about the Quick Sale Value of the property.
You give yourself the EDGE when you DO THE DEAL
CORRECTLY. You have a property that PRIVATE MONEY
LENDERS want to fund. You get a reputation for
putting together SOLID DEALS.
The Ultimate REO Report makes it easy to find these
types of LOW LTV DEALS. Don't settle for "so so"
deals. Not in today's market. You can cherry-pick.
Once you have that SOLID DEAL--do your LOAN PACKAGE
correctly. The Hard Money Loan Blueprint shows
you how, step by step, so you can THINK like a
private hard money lender and know that your
LOAN PACKAGE is complete.
Did you know that there is a 100% purchase lender for deals
in all 50 states when you have a BUYER READY TO GO?
And it doesn't matter whether it is a property
under contract or you have an option. The deal
can be funded 100% in a back to back closing with the
loan fees rolled into the loan.
(Details below about how you can watch a special
1 hour webinar conducted by this lender who is
one of the 300 lenders in the 2011 Private Money Lenders
Source. )
The 2011 Private Money Lenders Source has the 300 TOP
private hard money lenders who loan on residential
and commercial investment property, nationally,
regionally, and locally. Each lender has unique
lending programs and you can read about the
programs to help you choose the right lenders to
submit your deals. You get to deal direct with
the lenders and we show you how.
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