As they say, knowledge is power. When negotiating with a private money lender, know what you bring to the table. When you need funds fast for a real estate investment and don’t want to deal with red tape or submitting reams of documents to a traditional lender, a private money lender like Lightspeed Lending can make you as attractive as a cash buyer. They can even help you close a deal in 7 to 10 business days. But the best chance of that happening is when you have all your ducks in a row.
Keep these three tips top of mind:
- Think about collateral: No magical thinking. Because hard money lenders require an asset to guarantee the loan, and that asset is often real estate, be clear about what that property is worth (resale value) and how much income it’s generating.
- Do your research: Due diligence. Dig around to learn about the experiences of other borrowers. Start with the testimonials on the lender’s website — look for situations that match yours. Then ask for references.
- Get out your calendar: What’s your timetable? A lender is going to want to know how you’re planning to repay the loan; it’s up to you to show you’re reliable and solvent. What’s your forecast? Where is your income coming from during the life of the loan? Make sure your financial statement is up to snuff.
An agreement between a borrower and a lender like Lightspeed Lending should represent a meeting of the minds — so make sure your expectations match.