Lending finances such as real estate backed loans to people with low
credibility for buying properties is probably one of the most troublesome
businesses out there. Hard money lenders often work with a lot of unorthodox techniques
and methods to gauge the potential in the borrowers’ deals.
Hard money lenders
have quite an important role to play in the real estate industry. They have a
lot to offer to the market and the market has a lot to offer to them. But what
are the factors that show a hard money lender’s true worth? What are the key services
or approaches which make one hard money lender better than the other one? If
you are a money lender, why would real estate agents, brokers and their clients
and referrals give you more business? Give us a minute or two. We will help you
understand some of the core concepts implemented as strategies by successful
hard money lenders.
We all know the amount of effort lenders have to put in scrutinizing
the deals coming from people who don’t have much credibility in the market.
Most of us are well-aware of the basic concepts of the trade, but let’s take a
closer look at a more professional approach to yield better business and
reputation.
First impressions:
How the lenders manage their first interaction with loan applicants,
speaks volumes about their reliability and business standards. Most of the best
known firms respond to loan inquires within one business day. The sooner the
applicants hear from you, the more they’ll cooperate to get the loan processing
move at a faster pace. Your prompt response-time assures the interested
borrower that the inquiry phase, which goes on for days with other
institutions, will be done in a lesser timeframe. If you keep them hanging on
for more than a week only to provide a basic response for loan eligibility, the
borrowers will immediately start applying to other firms.
Pricing:
Is your deal reasonable for the borrower, or too costly? Hard money
loans are often costly, but the good firms and good lenders are usually
interested in helping their clients instead of adding burdens on them. Before
sharing your deal with your client, compare your offer with the offers floating
around in the market for similar deals and make adjustments if needed. But make
sure you do not compare your offer with unreliable lenders carrying a
not-so-good reputation in the market.
Are your policies too rigid?
Nobody wants to deal with a hard money lender whose policies enforce
too many restrictions. The type of property the clients are interested in, the
vacancy rates, the area in which they wish to buy the property and other
aspects, such as, the rules on debt service coverage - can be extremely
problematic if your policies are not client-friendly. Lenders’ policies should
be helping people get the best of what the current market has to offer.
Once you take care of all the above the factors and the borrowers
agree to do business, make sure you have all the necessary terms and
commitments documented.
Remember, hard money lenders rely more on the property values than the
credit-worthiness of the borrowers. In our economic times, if this business
form is utilized well with precautionary measures, it can provide large
benefits for our economy and for individuals too. So, do the right researches, keep
updating yourself with the services and market strategies, and reap the
benefits.
LeadXL provides accurate, actionable information and analysis,
resulting in increased conversion of leads from ALL sources. Lead XL was built
for lenders following a clear path to success: Analyze. Revive. Enhance.
Contact Lead XL today!
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