Finding Money – Tips for Locating Hard Money Lenders for Real Estate Investing

Hard money loans are available from a variety of sources.

First, check with your local real estate investor group. This is a great place to network with other investors and find out where they get their hard money loans.

You can also look in your local newspaper under the "money to lend" section.

Additionally, your mortgage broker may be able to put you in touch with some hard money lenders, or, he may even broker hard money himself.

You might also consider another source for your hard money needs: Yourself.

That's right. You probably have access to money that you never thought about using to finance your real estate investments. Here are two possibilities:

Credit cards - If you have a substantial amount of untapped credit, chances are that you regularly receive offers for three to six month long teaser rates. This could be a great way to get the money that you need at a substantially better interest rate than a hard money lender would give you. But remember, as with all hard money loans, it's a short-term proposition. You need to get in and out and pay off your credit cards before the teaser period ends and the interest rate spikes.

Home equity loan or line of credit – Do you own your own home? If yes, and you have some equity in it, you might consider borrowing against it to do your hard money deal. Again, it will probably be at a lower interest rate than a hard money lender would give you. If you get a line of credit, this can be an ongoing source of money to finance deals. Once you finish a deal, pay back the money and it's ready for the next time.

Remember too, that just like private investor loans, you can always encounter new sources for hard money by talking to lots of people about what you are doing. Put the word out that you are in the market for hard money, and you are bound to find some lenders.

Until my next post,

James