1- flippers (when they buy below 70% of real market value)

2- credit challenged with scores below 500 but expect to be cleaned up within a year

Mostly, the hard money borrower shouldn’t be buying a owner occ home until they can qualify for a good loan. However, you sometimes find a borrower who is right out of BK who needs us.

If the seller carries 30% in a second position, and the price is “such a deal”, the private money mortgage can make sense.

I’ll bet you encounter this maybe once in the next 10 years. So your earlier statements are correct.

Yes, it is true that some buyers do not want or need any assistance at all with the loan process. I never did, but I did use the agent’s lending resources or the relo company’s lending resources.

I have to say that usually my primary consideration was getting the house and not getting the best deal on the loan OR the house. Just thinking back over the years and the houses I’ve bought.

A couple of times it was about the best deal, but not usually.

In general, borrowers can apply to any banks they want and explore the best loan packages in terms of interest and payment flexibilities. Though I personally prefer agents with this kind of knowledge, I don’t agree that they should charge more than the agreed commission just because they have access to lenders.

I do residential 95% of the time and investor only when the “investor” is really a “residential type” of person and the property is RESPA 1-4. I shouldn’t need “hard money” for residential…should I? Correct me if I’m wrong there.

I don’t believe in “cross over” for me or our agents. If Commerical or Investor is their forte…great. But pick one side or the other and don’t dabble in Commerical and Investor…refer it to someone who does it day and night, is my mantra. Don’t do too many things half-butted. Do what you do, well and often.

Hard Money equals “not my thing” all the way around the way I see it, Brian. But please do correct me if I’m wrong there. The “darkest side” I get to, and not often, is pre-payment penalty.

I am going to write a piece on “the practical aspect and legitimacy of ‘pre-payment’ penalties, so people understand when they are appropriate and when they are not appropriate and why they are there in the first place.

then I need to educate you. A real life example: A hard money loan helped a 30 year old buy a ten unit that he sold for a $900,000 profit six months later. I’ll head over to the dark side (post)

Tell me Connie Mafucci would be proud, not Jim Buividas

Point is Brian, when the scenario moves from easy to harder…the buyer is by that fact, put on notice that this is NOT a run of the mill situation.

Not saying they shouldn’t push the envelope. I’m saying the agent should be making them aware that they ARE pushing the envelope and where and how. Covers the lender better too, for the agent to be “witness” to the fact the buyer chose to push the envelope, so the buyer can’t later “point fingers” saying “they didn’t know”.

I’m doing “The Darkside Post” now to make you guyes happy and to show I’m not saying everyone needs to be the Pollyanna Version. But agents can’t put blinders on either. If they can at least to Pollyanna Version, I’d be a lot happier.

Besides Mr. Hard Money Loan…I run when I just see your blog and the words “Hard Money Loan”. I take out my garlic and wooden stake when I hear the words “Hard Money Loan”

Understood. I’m going to bed.

Just so there is no misunderstanding. I do NOT operate in general real estate the way I did with the builder. I completely understand my current role, and my prior role, and the major differences between the two. To pull this back to the original post, I carried over a very bad habit and intend on changing it.

By the way, Ardell, I subscribed to your feed a few minutes ago. Love knowing what’s going on on the other side of the country. Thanks for the discussion tonight, and I’m sure we’ll talk again.

No brokerage relationship and TB are not a lot different from one another. Buyer still has to fend for himself. So don’t use what you did for them there as what you should do for buyers in real estate outside of the builder’s office.

A builder never wants someone in their “store” to do anything except “close them”.

I’ll be the hungover guy throwing spitballs at you. I’m going, Ardell.

Now, I’ll be serious. Morgan is correct when he suggests that your presentation might be limiting because of conforming 30 year fixed loans..who cares? The point is that you have a good process for dealing with buyers that exercises your fiduciary duty. Your out is when you say, “Oops! Out of my scope! Let’s get you re-qualified with a XYZ loan”

You don’t have to be an expert, Ardell when pre-qualifying a buyer, just knowledgeable. Jim Buividas would be proud