Hard money and private real estate financing can move more efficiently than a traditional bank process, but every transaction still requires accurate information, property review, title work and supporting documentation.
Here is what qualified real estate investors can generally expect.
Start by providing the property address, requested loan amount, purchase price or estimated value, loan purpose and desired closing date.
For renovation or construction projects, include the proposed budget and scope of work when available.
The preliminary review considers the property, available equity, requested financing, project plan and proposed exit strategy.
Additional information may be requested to determine whether an appropriate financing option is available.
An initial review is not a final loan approval or commitment to lend.
When a potential financing option is identified, preliminary terms may be provided for review.
The terms may describe the proposed loan amount, pricing, loan duration, required equity, estimated fees and major closing conditions.
Terms remain subject to underwriting, valuation, title, documentation and final approval.
The next stage may include:
Responding quickly to document requests can help prevent avoidable delays.
After the transaction satisfies the required underwriting and closing conditions, final loan documents are prepared and reviewed.
Closing timing depends on the complexity of the transaction, title status, valuation, insurance and how quickly the required documentation is completed.
Qualified transactions may close in as little as several business days, but no closing timeline is guaranteed.
Depending on the transaction, be prepared to provide:
Not every item is required for every loan.
Submitting basic property details does not necessarily involve a hard credit inquiry. Credit authorization requirements should be disclosed before a credit report is obtained.
No. Preliminary terms are subject to property valuation, underwriting, title review, documentation and final approval.
An initial response may be available within one business day when sufficient transaction information has been provided.
Common causes include title issues, incomplete documentation, insurance problems, valuation delays, changes to the transaction and inaccurate property information.
A valuation, appraisal, broker price opinion or property inspection may be required depending on the transaction.
You may discuss a potential transaction before signing a contract, but a purchase agreement will generally be required before final approval and closing.