Hard Money Lenders Want to Know You and Your Real Estate Investment Deal
If you’re new to real estate then you might well be worried about successfully closing a deal. After all, when you’re looking to buy property there’s a lot to consider and it’s easy to let something important slip. The last thing you want is to lose a deal because of a mistake you could’ve avoided, which is why we’re here to give you a basic breakdown of what a lender will be looking for from you.
Know Your Numbers
It should come as no surprise to anyone that the key to success in real estate often comes down to understanding the math and the market. For example, if you’re planning to renovate, then it’s very important to have numbers like your budget or the estimated ARV (after repair value) of the property on hand.
That’s not to say you need to memorize all these numbers. Being able to recall this kind of information is useful, but don’t panic if your memory isn’t up to the task. Just make sure you have everything written down and organized in a way you can easily access when asked.
A Professional Personality
Personality is a tricky thing and, for some people, giving off a professional persona is always going to be easier than it is for others. The basics – like wearing smart clothing and making sure you’re punctual – are obvious, but as important as those things are, it’s equally important that you are confident and competent to work with. A part of this, as we mentioned before, is about being able to provide good numbers, but it’s just as important that you understand the practical side of things. Being able to answer questions like ‘what could go wrong during the renovation process?’ and ‘what factors could affect someone’s interest in this property?’ is vital to showing that you’re serious about making this deal work.
Now, for many of you, this will be the trickiest thing to show. In fact, the chances are that if you already have excellent experience, then you’re not the person clicking on this article in the first place.
So what do you do if you’re a first-time buyer looking to make a deal?
Well, the first thing to say is that there’s more than one way to show experience. You might not have a portfolio of previous sales under your belt, but if you have any experience working in a related field then that can still go a way to showing you know what you’re talking about.
That being said, it’s far from impossible to close a deal without previous experience. Hard money lenders, in particular, are willing to give someone a chance on their first property, so long as they’re willing to accept a lower return. Yes, this means you will have to bite the bullet on your first deal or two, but the flip side is that after those deals are closed, you will have gained demonstrable experience.
If there’s one thing it’s important to understand when you’re first getting to real estate, then it’s that the best harvests take longer to sow. In the eyes of lenders, an experienced client is a valuable commodity and every deal you successfully close makes you more valuable. If you know what you’re doing, and you’ve got the numbers and the portfolio to prove it, then before long, people will be practically queuing up to work with you.