Frequently Asked Questions
- What is a “hard money” or “rehab loan”?
- Why would you use a hard money lender?
- How does the program work?
- What are the costs?
- How do you decide how much to loan?
- Where do you loan?
- Do I need to put any money down, or, need any money in the bank?
- How much will my payments be?
- Will you finance commercial properties?
- Will you finance apartment buildings?
- Do you allow interest to be deferred to the end of the loan?
- Do you require a survey?
- What paperwork do I need?
- Do you loan on rural property?
- Does My Rehab Lender lend on properties in the flood zone?
- Will you loan money in my corporate, LLC or trust name?
- Do you pull my credit for each loan?
- What kind of credit rating do I need to get approved for a loan?
- How long does it take to get approved for a loan?
- How long does it take to close the loan once I have been approved?
- Should I have a property under contract before I fill out the loan application?
- What is the term of the loan?
- How do I get refinanced to pay off the hard money rehab loan?
- What is the interest rate charged?
- Can I get purchase and rehab money too?
- How many investment properties can I finance at one time?
- Do I need to get an appraisal?
- How does the draw procedure work?
- Do you make loans on rental property?
- What type of insurance do I need on the property?
- Where do I get an application and other forms needed?
- Do I need to be an experienced rehabber to qualify?
“Hard Money” loans or “rehab loans” as they are sometimes called refer to non-conventional real estate loans. They are usually funded by private money sources and specialty lenders. Interest rates and points on such loans are usually higher. Terms usually range from 3 to 12 months. Hard Money loans have one basic requirement. There has to be some substantial equity in the property to give the lender a reason to invest their funds in an otherwise risky venture.
The property to be purchased might be presently vacant and in need of repairs. It may be older property in a failing neighborhood which has the potential for revitalization. It may be a foreclosure and can be purchased on a short sale. Or you may just need a quick closing to secure a property before you find an investor/rehabber to which you want to wholesale the property to. Or you may want to purchase a run down piece of property, rehab the property, and refinance it for rental income. In all these cases, you would need a hard money loan because conventional financing is just not an option or it would take too long to secure. “Hard Money” is just a cost of doing business and an effective method of doing business as a real estate investor.
We loan money in most areas to people who buy houses, fix them up, and sell them or refinance them to rent out. We work very hard to fund quickly so that you can demand large discounts from your sellers. We normally lend on single-family and small multi-family properties. We do not lend on mobile homes. Our program is designed for people who can buy right, fix a property up quickly, and then get it re-sold or refinanced. There are three easy steps to our loan process: submit an application to get pre-approved, find a property and get it under contract and send us the information, prepare a cost estimate for repairs and then we process and close the loan.
Closing costs are minimal – two (2) points plus other costs associated with any other loan closing such as attorneys fees, title company fees, taxes and insurance for the year, etc. We have no other fees!
We can loan up to seventy (70) percent of the after repaired value. If you are buying right, you could get in for no money down, however, you cannot get cash out of a hard money rehab loan.
We loan in Dallas, Tarrant, and Collin Counties in Texas.
Yes and Yes. In some instances no money down loans are available. As long as the loan to value, including purchase price, rehab and closing cost does not exceed seventy (70) percent you can acquire the property for no money out of your pocket. You must however have reserves to fund the intial repairs as well as make the interest payments. You cannot get cash out of a hard money rehab loan.
Your loan is an interest only loan. To figure your monthly payment, simply multiply the interest rate(12%) by the dollar amount of your loan. Since the interest is computed on an annual basis, you simply divide by 12 (months) to get your monthly payment. We also collect for taxes. Each monthly payment will include an amount for interest and and an amount equal to one twelth of the annual property tax bill.
On a case by case basis.
We will fund up to eight (8) units under these rates and terms, strong cash and strong credit are needed to qualify for these larger loans. A higher unit count is on a case by case basis and terms will vary depending on the deal.
Not at present. You pay interest only payments monthly on the amount of the loan outstanding during the loan term.
Click here to apply. Print and fax in or fill out the online application. We will contact you usually within twenty four (24) hours to discuss your application and inform you of additional documentation that may be needed.
No, not at the present time.
On a case by case basis and only if no part of the structure itself is in the flood zone. You will also be required to carry flood insurance.
Yes. Any and all of these entities require additional paperwork to be supplied. These additional items are listed on the Loan Application. If your reasoning for wanting to close in the LLC is to keep it off your credit report, please note that we do require a personal guarantee and it will be on your personal credit report.
We ask that you provide a current scored report.
While we do need a credit report we do not have a score card. We want to know how you pay your debts. Since this loan is assett based, credit scores are not used.
Within one or two days after you have submitted your loan application and documentation, we can usually make a decision or give you a general idea if we can help you. In many cases, once an application is completed, you can be approved in minutes.
There are many factors which prevent us from making any guarantees as to if or when a loan will close. If you have already been pre approved in advance, it normally takes around 5 -7 business days once you find a property and submit the property information to us for a rehab loan. Sometimes it takes a little more or less. Many times it all depends on how long it takes to have a title search completed, get the appraisal and schedule a closing. There are other factors as well that can delay a closing. Always allow yourself plenty of time when writing your contract. In general it takes between 1 to 2 weeks, depending on how quickly you get your documentation to us.
My Rehab Lender, Inc. can pre-approve you for our loan program prior to your finding the right investment property. Our process is two-fold: first we approve the applicant, then we approve the investment property you are interested in financing. We recommend that you go ahead and get pre approved so once you find a property to purchase then we can close faster.
We write 12 month interest only loans. We charge two (2) points at closing. The purpose of a hard money rehab loan is to either turn the property quickly or have it rehabbed and refinanced with a conventional lender.
If you are purchasing a property to rehab and rent, we can recommend permanent lenders that do long term loans. You may also seek alternate sources to refinance and pay off your rehab loan if you wish.
The current interest rate is 12%.
Through our rehab loan program My Rehab Lender, Inc. will fund the purchase and all your repairs up to seventy (70) percent of the after repaired value (ARV). We do require you to complete a detailed, itemized repair list of the repair work. A draw schedule identifies the number and amount of each draw. After a certain percentage of the repairs have been completed and verified, the monies are forwarded to you. You will not get cash out at the closing.
We will start with one property until we have established a business relationship with you. As you become more experienced and have successfully completed a few loans with us, we can look at funding multiple properties as they are identified.
Yes. My Rehab Lender, Inc will order an appraisal from a qualified appraiser who is familiar with evaluating investment properties. The appraiser will determine an “after repaired value” (ARV) based on the list of repairs that you and or your contractor will be completing.
You may have as many as five (5) draws as described in the “Rehab Loan Draw Schedule”. Each draw request will require an inspection to ensure that the work is completed in a thorough and professional manner. After completing a certain percentage of the required work, you will fill out a “Draw Request Form” and forward this to My Rehab Lender, Inc. We will schedule an inspector to visit your property and authorize release of your funds. The inspector is one approved by My Rehab Lender, Inc. There will be a $100 inspection fee charged for each draw, which is deducted from the total draw amount. If you request a draw and the work requested for reimbursement is not complete, you will be charged for the initial inspection and for the re-inspection, if you request one. Upon completion of the complete project you (and the contractor if there is one) will sign a completion certificate verifying all work is complete and code violations if any have been satisfied. Your payments must be current in order to draw funds. Draws will not be released on or after the first payment is due and not received.
Yes, we do loans on rental property. It is usually when the property needs to be rehabbed prior to being rentable. When the renovation is completed, you will need to have the property refinanced.
Before closing you will need to have a 12-month prepaid fire and extended coverage policy ,with vacancy, vandalism, malicious mischief, and theft coverage.
All forms needed to apply, get pre-approved and also to submit your property for approval are on our website. (Click Here)
Although many of our borrowers are experienced in real estate investing and rehabbing, investors with limited experience can still qualify on a case by case basis.
All programs and guidelines are subject to changes, modifications, deletions and/or cancellations.