1 commercial hard money lending “hard money easy profits.” ~ lee anthony loan consultant –...
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Commercial Hard Money Commercial Hard Money LendingLending
“Hard Money Easy Profits.”~ Lee Anthony
Loan Consultant – Hard Money Guye
1512 BroadwayDetroit, Michigan 48226
[email protected](313) 772-1958
What is Hard Money?What is Hard Money?
A hard money loan is loan where a borrower A hard money loan is loan where a borrower receives funds secured by real estate. Hard receives funds secured by real estate. Hard money loans are typically issued at much money loans are typically issued at much higher interest rates than conventional loans. higher interest rates than conventional loans.
Many hard money mortgages are made by Many hard money mortgages are made by private investors, generally in their local private investors, generally in their local areas. areas.
Source: http://en.wikipedia.org/wiki/Hard_money_loan
Is it Regulated?Is it Regulated?
Mortgage Brokers, Lenders, and Servicers Licensing Act – MCL 445.1651Mortgage Brokers, Lenders, and Servicers Licensing Act – MCL 445.1651 Mortgage Loan Originator Licensing Act – MCL 493.131Mortgage Loan Originator Licensing Act – MCL 493.131 Secondary Mortgage Loan Act – MCL 493.51Secondary Mortgage Loan Act – MCL 493.51 Consumer Financial Services Act – MCL 487.2051Consumer Financial Services Act – MCL 487.2051 Consumer Mortgage Protection Act – MCL 445.1631Consumer Mortgage Protection Act – MCL 445.1631 Mortgage Lending Practices Act – MCL 445.1601Mortgage Lending Practices Act – MCL 445.1601 Regulation X – RESPARegulation X – RESPA Regulation Z – TILARegulation Z – TILA Regulation B – ECOARegulation B – ECOA Fair Credit Reporting ActFair Credit Reporting Act Various FTC RulesVarious FTC Rules
Safeguard RuleSafeguard Rule Red Flags Rule (ID Theft Prevention)Red Flags Rule (ID Theft Prevention) Risk-Based Pricing RuleRisk-Based Pricing Rule
"Mortgage loan" means a loan secured by a first mortgage on real property located in this state and used, or improved for use, as a dwelling and designed for occupancy by 4 or fewer families or a land contract covering real property located in this state used, or improved for use, as a dwelling and designed for occupancy by 4 or fewer families.
Why Hard Money?Why Hard Money?
Faster ProcessFaster Process FlexibleFlexible Lend using ARVLend using ARV Leverage EquityLeverage Equity Higher Debt RatioHigher Debt Ratio Distressed PropertyDistressed Property
Leveraged InvestingLeveraged Investing
Purchase Price of Property 30,000$ Cost to Repair / Rehab 15,000$ Appraised Value 90,000$ Max Loan Amount 45,000$
Loan Principle Balance 45,000$ Closing Costs & Fee 6,750$ Property Tax Impound 2,500$ Monthly Payment 675$ Total Cost of Loan* 59,650$ *assumes 8 months of Interest
Sale Price 90,000$ Principle + Costs (59,650)$ Profit 30,350$
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Your out of pocket costs:
$6,750 – Closing Costs$2,500 – Property Tax Impound$5,400 – Monthly Interest
$14,650
Return on Investment (ROI)
Purchase-Rehab LoansPurchase-Rehab Loans Borrow against the Borrow against the
projected After projected After Repair Value [ARV]Repair Value [ARV]
Purchase Price + Purchase Price + Repair CostsRepair Costs
Setup Fund Control Setup Fund Control Release as Repairs Release as Repairs
CompletedCompleted
Property RequirementsProperty Requirements
Brick Steel GlassBrick Steel Glass 5 Unit or Plex5 Unit or Plex Multi Family Multi Family
RetailRetail Parking Lot Parking Lot
DesiredDesired RedevelopmentRedevelopment
AppraisalsAppraisals
Specialized AppraisalSpecialized Appraisal List of Required List of Required
Repairs by Licensed Repairs by Licensed ContractorContractor
Predominant SalesPredominant Sales Company Approved Company Approved
Independent Independent Licensed AppraiserLicensed Appraiser
Desktop / Full Desktop / Full AppraisalsAppraisals
Borrower ProfileBorrower Profile
Home OwnerHome Owner Experience with Experience with
PropertyProperty Ability to RepayAbility to Repay Credit HistoryCredit History
NO Recent ForeclosuresNO Recent Foreclosures NO Current BankruptcyNO Current Bankruptcy NO Consistent NO Consistent
Negative IssuesNegative Issues
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Be PreparedBe Prepared AppraisalAppraisal Loan ApplicationLoan Application Credit ReportCredit Report Income DocumentsIncome Documents Title CommitmentTitle Commitment Purchase Purchase
AgreementAgreement
Cash into ProjectMinimum 10%
Realistic Exit StrategyExtension Available
Property Taxes Escrowed / Impounded
ACH PaymentsAutomatic Withdrawal
CONTACT:Lee Anthony [email protected]