Whether you’re planning on investing in a property to diversify your portfolio or intend on flipping homes, you’re making a great decision. Real estate investment is one of the best ways to ensure long-term financial security. Unfortunately, not everyone has thousands or millions of dollars resting in their bank accounts that they can use to start purchasing a property. This means that you will have to look for a financing option.
Nowadays, there are many financing methods that can be availed to invest in rental properties. However, not all of these methods will work for everyone, as most financing methods have very specific requirement criteria and it can be challenging to meet those.
For people who aren’t qualified for traditional mortgage loans, a great option to turn to is hard money loans. However, most people don’t know hard money loans work. Hence, they struggle to find good hard money lenders.
If you’re planning on making a real estate investment and are wondering how to find the best hard money lender in your area, read on.
How To Find The Best Hard Money Lender In Your Area
Not all hard money lenders come with the same reputation. Since it is a big decision, it is important to do thorough research before deciding which lender to consult. Following are some tips to make the process easier for you.
· Google It
In today’s Information Age, the internet is the most important tool you can use. With the touch of a button, you can find almost anything you want – including the best hard money lender in your area. Simply searching the keyword ‘hard money lenders for real estate in (mention your area)’ will present you with a compiled list of hard money lenders that you can approach.
However, do not depend on just the internet to make your final decision. Instead, use it as a tool to shortlist some options. Afterward, you can compare and evaluate each of the lenders to determine the best option for yourself.
· Network With Real Estate Professionals
If you are planning on investing in real estate properties, it would be smart to network with people who have already been in the business for a while. Real estate agents, mortgage brokers, attorneys, people who flip houses, people with diverse portfolios, and other real estate professionals can help you learn a lot about the business.
In addition to that, they will also have extensive knowledge about real estate networks and will be able to connect you with the best hard money lenders in your area. In the long run, networking with real estate professionals will prove to be very helpful.
· Attend Local REIA Meetings
Another great way to find hard money lenders in your area while also expanding your real estate network is to attend local Real Estate Investor Club meetings. There are high chances that you will meet at least a handful of hard money lenders who are also looking for prospective buyers.
When you run into one, make sure that you put in the effort to build a good rapport with these hard money lenders. This will help increase your chances to access capital whenever the need arises. Additionally, you can talk to other real estate investors in the meetings and ask for recommendations about the best hard money lenders.
· Make Use of Social Media
Just like any other professional in today’s interconnected world, hard money lenders are also taking advantage of social media to attract potential clients. This is because the reach social media has is more than any other form of communication, and businesses can reach a significant chunk of their audience within a very short span of time.
As a real estate investor, you should take full advantage of this. Use social media platforms such as LinkedIn, Facebook, and even Instagram to find the best hard money lenders in your area. In most cases, these websites also allow common people to give honest reviews about their services. So you can go through these to determine whether a lender delivers the benefits they promise.
· Background Check
Once you have narrowed down a list of potential hard money lenders that you can approach, it is crucial to perform a thorough background check. Fortunately, there are a lot of ways to do so. First and foremost, you should check online reviews. If everything checks out, try to get in touch with previous clients to ensure that the reviews are honest.
It is possible for scammers to easily post fake online reviews, so don’t rely on the reviews on their website too much. If you have started networking with other real estate professionals, you can also consult them to know whether a hard money lender has a good reputation or not.
· Loan Rates and Terms
Of course, even if all of the above checks out, it still doesn’t mean that a hard money lender is the best option for you; this is because you also need to take your own circumstances into account. A hard money loan will only be beneficial if the numbers work for you.
Before choosing a lender, make sure that you estimate cash on cash return to determine whether the numbers work for you. Additionally, educate yourself about how different loan terms affect the rate of return on a real estate property so that you are fully aware of what you are getting into.
While real estate investment is a great opportunity to secure your financial future, it is necessary to make the right decision every step of the way; or else you put yourself at the risk of making a potentially expensive mistake.
If you’re looking for a hard money lender in Dallas, consider visiting DFW Specialty Lending for a no-obligation consultation today.