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INVESTORS AND “HARD MONEY” LOANS

August 1, 2011 No Comments

 

LENDER’S VIEWPOINT

By Owner

There was a really good article in the Wall Street Journal last week about Hard Money loans. It was informational to borrowers and investors alike. It spoke of the fact that Hard Money loans will account for 1% of the 5.5 million home loans originated this year, up sharply from prior years.

The Article features a Dallas attorney who has doing Hard Money loans as a “side business”.

He believes that originating home loans in the current environment, when many economists believe housing is at or near the bottom, is less risky than putting money in the “volatile stock market or opaque bond market.”

He states further “I can’t drive by and look at those stocks and bonds.” Plus, he says, investing in residential real estate earns “passive income that doesn’t require much work from me.”

The interest rate paid on these investments can be anywhere from 9% to 14% with 12% being fairly typical. They can be a first or second mortgage ranging in size from $30,000 to $1,000,000 or larger with a term of from 6 months to 7 years or more. These loans are secured by land, 1 to 4 unit residential, 5+ unit residential (deemed commercial), office buildings, strip centers, large commercial, etc.

The main qualification for a borrower is: 1. Equity or a good down payment and 2. Ability to repay the loan. If they do not make payments, they could forfeit the property that was the security for the loan to the investor.

Check out our website for further details.

Owner is a CA DRE Broker with over 23 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

The Guy In The White Hat Comes To Homebuyers’ Rescue!

May 18, 2011 No Comments

The Guy In The White Hat Comes To Homebuyers’ Rescue!

[youtube=http://www.youtube.com/watch?v=k3eFWtb6pz0&w=448&h=252&hd=1]

 

Ever since we opened our doors in Sonoma County in 1988, we’ve given extra care to round up people who have been “Turned Down Elsewhere?” – because of credit, income, the property or a combinations of these.

We are the local Hard Money Lender who can help rescue your deal…and get your Buyer into that Home!

Here are some Hard Money Buyers recently rescued…

Home Purchase – Purchase price $237,000. Buyers had a friend who loaned them the down payment of 20% as a 2nd mortgage. Purchase money first of $189,600. 100% combined loan to value!

Flipper – 80% Loan to Value (LTV) in Santa Rosa. Loan amount $315,000 on a fixer upper. 12% interest only for 12 months. This loan was done in 4 days!!

Owner Occupied Principal Residence Purchase – A conventional lender denied this loan due to a foreclosure. 50% Down. Loan amount $90,000 at 12% interest only. 10 days from application to recording!

Loan approval is based on just 2 criteria:

1. Good Down Payment

2. Ability to Repay

  • FAST Private Money for purchasing in Sonoma County and contiguous Counties
  • FICO is not a factor
  • Up to 75% loan-to-value – Case by case basis
  • Loan amounts from $75,000 to $400,000
  • Owner Occupied and Investor Loans

SPECIAL NOTE: WE CAN DO A LOAN FOR SOMEONE FRESH OUT OF FORECLOSURE, BANKRUPTCY OR SHORT SALE!

CALL FOREST at 523-2099

Or email him at forest@sunpacmortgage.com

Visit us @ www.sunpacmortgage.com

“LIKE” us @ www.facebook.com/sunpacmortgage

“HARD MONEY” OR “PRIVATE MONEY” LOAN REVISITED

May 2, 2011 No Comments

LENDER’S VIEWPOINT

By Owner

There are several types of loans you can use to purchase or refinance. This applies whether you are buying a home to live in, a home to rent out, or a commercial building. They include the standard 30 year fixed rate mortgage, the government FHA/VA loans, a commercial property SBA loan, or a Private Money loan.

Private Money is borrowed from private individuals. I bet you’ve borrowed money from a relative. That was a Private Money loan, likely unsecured. It wasn’t from the bank or some other institution. Most private money lenders/investors lend money through a mortgage company (there are laws that require this). The rates and fees are higher than those you’d get from a bank or credit union that does 30 fixed rate mortgages.

Why then would anyone borrow Private Money? There are lots of reasons.

You can get a Private Money loan in spite of a foreclosure, bankruptcy or short sale!

I thought to make the above sentence read like a headline, because it should. No bank or credit union or anyone doing home loans other than Private Money will lend to someone who had a recent bankruptcy, foreclosure or short sale. Further, the property you want to borrow against may not be something a bank will lend on. Banks require a property be in good shape. What if you are looking for speed? Private Money loans are generally much faster than a bank loan. What if your credit isn’t bank worthy?

That’s because Private Money loans are based largely on equity. The most you will get is 70% of the value of the property. If it’s worth $300,000.00 you will be able to get $210,000.00. If you want a 100% loan, Private Money will not work.

Here is an example of a Private Money Loan. The Buyer had almost all of the money to purchase a house. She needed only $75,000.00 more – but didn’t qualify for a bank loan. The purchase price was $231,000.00. She only wanted to borrower 32% of the value. That loan got done within 4 days for a quick close. She beat out other’s that put in offers for the house. She could and did quickly close and her house payment is the payment on $75,000.00.

Another example. A contractor wanted to buy a dumpy house. No bank would lend on it because it was so dilapidated. The contractor had enough for a decent down payment and proved he had enough to money fix it up and then resell. He got a Private Money loan and was able to fix up the house and pay off the loan within 4 months.

Maybe you need a Private Money Loan!

Owner is a CA DRE Broker with over 20 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

Sun Pacific Investor Quarterly

April 27, 2011 No Comments

So much change has been wrought in the lending industry since what has been deemed the “mortgage debacle”.  With the dust somewhat settling on the new lending landscape it’s time to inform Investors, Brokers  & Borrowers of some of the regulatory changes impacting Hard Money.  These changes impact each & every one of you. I’ll see YOU on May 10th.

Investors Newsletter Volume 7 Issue 4

Increase your income doing hard money loans & learn more about investing safely by attending our Hard Money Seminar with local attorney as guest speaker!  5:30pm on TUESDAY, MAY 10th at the offices of Sun Pacific Mortgage – 800 Mendocino Avenue #2, Santa Rosa.  RSVP please

Unique Identifier # 289456

forest@sunpacmortgage.com

Sun Pacific Mortgage & Real Estate (707) 523-2099

800 Mendocino Avenue #2, Santa Rosa, CA 95401

www.sunpacmortgage.com

“Like” us at www.facebook.com/sunpacmortgage

4 Ways to Buy a Home

December 29, 2010 No Comments

 Newly Built Home – There are still newly built homes on the market.  In the Sunday section of the paper these are highlighted with a map.  Sometimes there is special financing available through the builder.

  1. Resale Home – These are homes for resale by the owner.  Sometimes the owner still lives in them and sometimes they are empty.  Financing is available through the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac.  All three agencies require proof of income, a down payment and will examine your credit.  30 year fixed mortgages are available.
  2. Short Sale – These are homes for sale that require homeowner/seller approval and lender approval.  The seller owes more than the property is now worth.  As an example, the mortgage owed is for $400,000, but the house is only worth $250,000 right now.  The seller and their mortgage holder have to approve the contract for sale.  The loan you get will be a typical FHA, Fannie Mae or Freddie Mac 30 year fixed.  But you might have to wait – even up to 6 months – for the mortgage holder to approve a lesser pay-off.
  3. Foreclosure – For some reason a lot of people think buying a foreclosure requires a strange and different loan.  It does not.  BUT FHA, Fannie Mae and Freddie Mac do require an appraisal.  The appraisal cannot say the house is an extreme “fixer” and needs lots of lots of work, or you won’t get a typical 30 year fixed rate loan. If the foreclosure you are looking to buy is tired and dirty – which a lot of them are – you generally can get a typical loan.  If the property is an extreme “fixer” and it is obvious, the appraiser will note this and the lender will not approve your loan.  Other than that, buying a foreclosure is like buying a regular resale.

Owner is a CA DRE Broker with over 20 years experience in real estate and lending.  His number is (707) 523-2099.  See website at: sunpacmortgage.com.

The Wave Is Coming

December 27, 2010 No Comments

We keep hearing reports that the foreclosure wave is coming. It’s on the news and in the paper. Maybe it is, maybe it isn’t. We have not seen much evidence of it in Sonoma County. Here’s what we know so far… Fannie Mae has been holding back flooding the market with foreclosures so prices stabilize. That is working well. The Medium Price has gone up from $305,000.00 to $320,000.00 since January 2009. Foreclosures for sale have gone down from 350+/- in December 2008 to 116 as of today.

IF the wave is coming you need to prepare now. All offers made on foreclosures require loan approval be attached to the offer. Sometimes 2 loan approvals are required. If you do not have loan approval they will not look at the offer. Get loan approval now!

There are 3 types of loan you can get right now. Fannie Mae and Freddie Mac (usually 30 year fixed, low interest rate loans) for as little as 5% down. FHA an easier standard for loan approval and only 3-1/2% down. And lastly, private money from private individuals. These private money loans are needed if the house (a wreak/dump) does not qualify for the government loans. Private money requires 20% to 25% down, but the private party lending the money does not care what shape the property is in.

The Federal Government is keeping rates low. Normally rates are dictated by the yield on Treasury Bonds. Yields are up and rates should be up, but they are not. The guys on Wall Street are befuddled because the normal measure of interest rates isn’t happening. The “wave is coming” is the “perfect storm” for buying. House prices are low and interest rates are low.

This perfect storm lasts for a brief time, so get approved now and be prepared. Owner is a CA DRE Broker with over 20 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

WHAT IS A “HARD” MONEY OR “PRIVATE” MONEY LOAN

December 15, 2010 No Comments

There are several types of loans you can use to purchase or refinance. This applies whether you are buying a home to live in; a home to rent out; or a commercial building. They include the standard 30 year fixed rate mortgage; the government FHA/VA loans; a commercial property SBA loan; or a private money loan.

Private money is money borrowed from private individuals. I bet you’ve borrowed money from a relative. That was a private money loan. It wasn’t from the bank or some other institution. Most private money lenders/investors lend money through a mortgage company (there are laws that require this).

Why would anyone borrow private money? There are some great advantages. The property you want to borrow against may not be something a bank will lend on. Banks require a property be in good shape. What if you are looking for speed? Hard money loans are generally much faster than a bank loan. What if your credit isn’t bank worthy? A private money lender will lend you money even with bad credit!

Private money loans are based largely on equity. The most you will get is 70% of the value of the property. If it’s worth $300,000.00 you will be able to get $210,000.00 If you want a 100% loan, hard money will not work.

An example of a hard money loan just happened. The borrower had almost all of the money to purchase a house. She needed only $75,000.00 more – but didn’t qualify for a bank loan. The purchase price was $231,000.00. She only wanted to borrower 32% of the value. That loan got done within 4 days for a quick close. She beat out other’s that put in offers for the house. She could and did quickly close and her house payment is the payment on $75,000.00.

Another example, a contractor wanted to buy a dump house. No bank would lend on it because it was so dilapidated. The contractor had enough for a decent down payment and proved he had enough to fix it up for resell. He got a hard money loan was able to fix up the house and pay off the loan within 4 months.

Maybe you need a hard money loan!

[youtube=http://www.youtube.com/watch?v=V2ebzlL4360]

Owner is a CA DRE Broker with over 22 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

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