Hard Money Lending Chicago Guidelines For Real Estate Investors

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Hard Money Lending Chicago Guidelines For Real Estate Investors

This BLOG On Hard Money Lending Chicago Guidelines For Real Estate Investors Was UPDATED On December 5th, 2018

Investors has a preference where they like to invest their money. This includes lenders of hard money lending Chicago.

There is no laws in hard money lending Chicago that hard money lenders need to lend to all hard money borrowers.

  • Whether it’s in stocks and bonds, or real estate, there is a wide range of choices that investors can take and place their money to work
  • The return vary on risk factors that investors are willing to take as an investor
  • Private money investors who invest in real estate investors needs to be comfortable on which property to lend in
  • Finding a niche to lend in is a great start to start thinking about

Private Money Lending And Finding A Niche To Lend In

As a Private Hard Money Investor, Investors have the ability to control a bit more of what you wish to participate in within that realm.

  • There are numerous types of scenarios that hard money lending Chicago investors can review and figure out return on investment
  • This can be from simple single Family residences to complex commercial deals
  • There are even opportunities to play around the construction arena
  • I want to start going through them so investors can have a better understanding of what each can offer
  • There are factors you can take into consideration when reviewing that kind of opportunity and finding a niche to lend in

Finding A Niche To Lend In On Single Family Homes

Let’s start with the easiest of them all; the Single Family Residence.

  • This is a one family use home that can produce a return over time of about 6-10% per year
  • Of course there are factors investors need to consider before becoming a lender on an opportunity like this
  • Some of these are fairly obvious:
    • value of the property versus the loan amount requested (LTV)
  • Current condition of the property, tenants if any, their role in the property and what considerations they may or may not have, lease agreements, (how long are the tenants there?)
  • Tenant condition (Are they on time with payments, are they taking care of the property, etc)
  • Are there any existing liens or loans on the property?
  • Is the Borrower borrowing money or do they have other obligations on the property such as taxes or mechanics liens on the title?
  • All are relevant factors you should know while reviewing an opportunity

Risks Versus Rewards In Private Money Lending

When looking into becoming a private lender, this is a great place to start lending.

  • It is a single borrower, one unit so not so much to review
  • It is easier to see your way to profit in a short to medium term of time
  • It’s work no doubt (Unless it’s your brother or cousin, then it’s up to you and how you deal with your blood relatives)
  • The rewards can be good, it can be phenomenal for the borrower, especially if they are looking for a 30% return on the back end when they sell the home
  • Or if they can see their way to a 12% cap rate for a hold to rent scenario
  • Hard Money Lenders as the lender have the ability to gain interest income
  • Sometimes hard money investors can get some equity share
  • This depends on how you set up the loan or how your broker sets it up

Investing In Single Family Homes Versus Multi-Unit Properties

On Single Family Residences, otherwise known as SFRs, you have the ability to control factors easier than a multi-unit or commercial opportunity.

  • The ease of figuring out whether title is clear or not is easier to acquire
  • The property value is pretty easy to establish via Broker’s Price Opinion (BPO) or appraisal
  • The Loan terms are easier to set as it’s one title to deal with, no leases per se to have to renegotiate
  • (Most times that is handled by an assignment of leases and rents…simple doc)
  • Lastly you can see profit immediately via prepaid interest or getting your payments starting the 1st of the next month

Single Family Residences are not without their pitfalls, but if investors are experienced enough and savvy, hard money lenders can avoid the horror stories we’ve heard.

If you’re not sure how to start, or how to vet an opportunity and need some help, we’re here. Call us at 262-716-8151 or text us for faster response. Or email us at gcho@gustancho.com.

This article was written by Alexander Thomas Carlucci, senior mortgage advisor and contributing associate editor for Gustan Cho Associates.

Alex Carlucci is the number one premier hard money lenders in the United States. No hard money loan is too small or too large.  Whether you are seeking a $20,000 purchase, fix, flip rehab loan, or a $3,000,000 construction or bridge loan, Alex Carlucci of will be your lender of choice.  Most closings gets closed and funded in two weeks from the time of the private money loan borrower’s signed mortgage application and the receipt of mortgage docs.  Whether you want to become a hard money investor or be a hard money mortgage loan borrower, contact Alex Carlucci at 262-716-8151 or text us for faster response. Or email us at gcho@gustancho.com.

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