Wholesale Hard Money Lender

Finding a wholesale hard money lender is extremely difficult since hard money investors typically charge high retail interest, not wholesale interest. The reason being that they have borrowers over a barrel. People who are looking for hard money are typically tied to lower credit scores, or who need money real fast to tie up business opportunities. It can often take a month or six weeks to secure commercial funding from a bank, and that is often an eternity when a very hot business opportunity suddenly appears on the horizon. So why would the typical hard cash lender settle for twelve percent money when twenty percent or more plus three or four points is a common deal?

Hard cash lenders are ruthless in their zeal to maintain the upper hand in the lending agreement process. These private investors will typically fund sixty to seventy percent of a needed amount to make the deal work and in many transactions these investors want the borrower to put up assets of their own to secure the remainder of the agreement. When borrowers are willing to put up business real estate or a personal home as surety, the financier gets even more comfortable with the agreement. And in almost every case, if the borrower pays off even a wholesale hard money lender borrowing agreement early, there will be penalty points to be incurred for the borrower. With the population quickly rising and more and more of our lives being relegated to just a number, it can be easy to think that no one really knows us or cares. But Jesus made an amazing statement of God's individual concern for each of us when He said, "Are two sparrows sold for a farthing? and one of them shall not fall on the ground without your Father. But the very hairs on your head are numbered." (Matthew 10:29-30)

A wholesale hard money lender borrowing agreement is called upon to get people through tough times so that a business can be saved, an alluring piece of property can be bought or a project undertaken. In almost every case, the agreement is secured by some asset. The savvy lender will never give a loan for the entire amount of the property because of security reasons. In the event of a foreclosure, there is still some value with which to bargain a payoff. Typically, a wholesale hard money lender borrowing agreement will be used to seal a real estate deal of some sort. But since lenders are always looking for a way to make more profit, very expensive nontraditional properties such as an aircraft could be figured in the mix.

A businessman has been looking for a certain aircraft for two years, but the model is rare and out of his price range. Suddenly a broker calls and tells him a plane in Atlanta has just gone on the market for seven hundred and fifty thousand dollars, far below value. It will likely be gone within a few days. It will take weeks for the man to get a bank loan, so he calls a wholesale hard money lender but the investor's credit requirements are too high. He ends up at a private cash investor who only lends at retail interest prices and who doesn't care about the business man's credit score, but wants the potential owner to put up forty percent of the loan value through equity in his personal home. The loan will be for six months so the potential owner will have time to find conventional funding for the plane.

But in most cases a wholesale hard money lender, when they can be found, will be involved in real estate deals. And because it is this type of transaction, that the hard money provider is almost certain to be a local person living in the area. For example, if a home builder wanted to buy land for a new development, the builder will probably ask around at local banks and at mortgage and title companies for the name of a private cash lender. Since private lenders do not have the restrictions on them to which banks must adhere, the actual demands of the contract may differ from lender to lender. In all likelihood, the agreement will be made if the investor knows the land personally and the builder agrees to very tough terms, such as high interest rates, four or more points, and a time limit on the loan; probably not for more than eighteen months. And if there is an early payoff, the borrower may pay another point for an early closure penalty on the agreement.

Since a wholesale hard money lender is as rare as a monsoon in Arabia, expectations ought to be focused either on a retail money investor of hard cash or another funding source altogether. Because the whole banking industry has been recently turned upside down, the best bank lending agreements will only be for those with angel like credit scores. There will be a dearth of no money down loans and twenty percent of the cost will be the normal requirement for borrowers to add to the lending agreement. This will make a wholesale hard money lender even scarcer than five leaf clovers. The retail interest investor will have more control than ever in a hard cash market.

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