What do hard money lenders look for ?

Hard money lenders are private individuals or companies that provide short-term loans secured by real estate. These lenders have different criteria than traditional lenders and are primarily concerned with the value of the property being used as collateral. Here are some of the things hard money lenders look for:

Equity: Hard money lenders typically require a substantial amount of equity in the property being used as collateral. The lender will look at the current value of the property and the amount owed on any existing mortgages to determine the amount of equity.

Property condition: Hard money lenders may require an inspection of the property to assess its condition and potential resale value. The lender may also consider the property's location and the local real estate market.

Borrower experience: Hard money lenders may require borrowers to have prior experience in real estate investing or a related field. This is because hard money loans are often used for investment properties or projects that require some level of expertise.

Exit strategy: Hard money lenders want to know how the borrower plans to repay the loan. The borrower may have a plan to sell the property, refinance with a traditional lender, or use other assets to repay the loan.

Creditworthiness: While hard money lenders are primarily concerned with the value of the property being used as collateral, they may also consider the borrower's credit history and financial situation.

Overall, hard money lenders focus on the value of the collateral and the potential for profit, rather than the borrower's creditworthiness or income.