This blog will cover hard money lending Chicago guidelines for real estate investors. Investors have a preference for where they like to invest their money. This includes lenders of hard money lending Chicago.
There are no laws in hard money lending Chicago that hard money lenders need to lend to all hard money borrowers. Whether in stocks, bonds, or real estate, investors can take a wide range of choices and place their money to work. The return varies on risk factors that investors are willing to take as an investor.
What Is Private Money Investing in Real Estate?
Private money investors who invest in real estate investors need to be comfortable about which property to lend in. Finding a niche to lend in is a great start to start thinking about.
Anyone can become a private money investor. Experienced real estate investor who knows the ins and outs of commercial real estate investing can make a nice return on their money on hard money and private money investing. Hard money lending Chicago is a great field where you can get a lot of return on your money. In this article, we will discuss and cover using hard money loans for real estate.
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 they wish to participate in within that realm. There are numerous scenarios for hard money lending Chicago investors to review and determine the 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 better understand what each can offer. There are factors you can consider 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 one-family use home 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 such as the property’s value versus the loan amount requested (LTV). The 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, 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
This is a great place to start lending when looking into becoming a private lender. It is a single borrower, one unit, so not so much to review. It is easier to see your way to profit in short to medium-term 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).
Investing In Single Family Homes Versus Multi-Unit Properties
On single-family residences or SFRs, you can control factors more easily than a multi-unit or commercial opportunity. The ease of figuring out whether the title is clear is easier to acquire. The property value is easily established via the Broker’s Price Opinion (BPO) or appraisal. The loan terms are easier to set as it’s one title to deal with, with no leases per se to renegotiate.
hat 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.
Do You Need To Be an Experienced Investor To Invest in Multi-Family Homes?
You do not need to be an experienced, savvy real estate investor to invest in multi-family investment homes. 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.
Best Mortgage Lenders For Investment Property Mortgage Loans
Gustan Cho Associates is a mortgage broker licensed in 48 states with a national reputation of being able to do mortgage loans other lenders cannot do. Over 75% of our borrowers are folks who could not qualify at other lenders due to overlays, stress, last-minute loan denial, or not having the mortgage products. At Gustan Cho Associates, we only market mortgage loans that exist and are possible at competitive rates. Besides government and conventional loans with no lender overlays, we offer hundreds of non-prime mortgage programs including non-QM and non-prime mortgages.
Most closings get 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 us.
November 25, 2022 - 4 min read