When selecting a hard money lender, consider the following:
Lending Rates and Fees: Hard money lenders typically charge higher rates due to increased risk and less paperwork. Consider the interest rate and the origination fee, which can be up to 10% of the loan value.
Loan Terms: Check for a reasonable repayment duration (typically 1-5 years) and ensure there are no prepayment penalties.
Qualifications: Some lenders may require a minimum credit score, and will consider your experience, investment background, and the property's qualifications.
Funding Time: Choose a lender that can approve applications quickly, within a few days, to enable fast deal closures.
Up-front Fees: Be cautious of lenders charging up-front fees, other than for appraisals.
Local Focus: The best hard money lenders primarily serve local customers, as local lenders often offer more flexibility than national ones and know the areas better.
Remember, unlike many "private lenders" who are actually brokers, we use our in-house money at Vailmont Capital, avoiding the additional costs and issues commonly encountered with other lenders who raise capital from investors or broker deals with other lenders.