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The Five-Step Process of Hard Money Lenders Denver


April 18, 2018

When deciding to purchase an investment property for either investment or retail use, numerous considerable factors emerge. Especially when looking for manageable office space or a business space for your company, not only are you concerned with location but the funding of a project must also be considered. Often, investors and those business owners looking to close on a deal will face difficulties when confronted with typical lending policies and procedures but should not give up the hope of completing their desired project.

Instead of being shut down by a bank due to menial details or factors beyond your control, like timeframe, know their are other viable options available to you which can get you and your dreams back on track in no time. Hard money lending is a very specific type of financing availability from which the borrower receives monies based on loans secured from the true asset, which is often the real property.

These loans are more often quicker to close, secure, reliable, and can be completed throughout the entire process with ease of communication and knowledgeable sources when the correct lending partner is selected. While the process is far from simple, in terms of the details and moving pieces involved in any deal, they are not complex and often easy to complete - even for first time borrowers.

Each of the five steps involved in the process is vital to brining a deal to fruition and all parties available for closing. Retail investment purposes allow both a borrower and lender to feel secure with the process and having all of the details available for both parties is a positive factor for everyone.

Following is a detailed review of the process from start to finish, which will have you occupying a profitable piece of commercial real estate in no time at all.

CONTACT

Deciding on which financing options are best for your piece of real estate is obviously an important factor and can either begin the lending process on a positive note or leave you feeling empty when things are not all smooth out of the gate. While seeking opinions from multiple sources is always recommended, trusting a company with over a decade of experience and a proven track record of successful deals with positive reviews is obviously a good place to start.

Most new companies charge fees and regulatory prices, even for an initial set-up, but our history allows for free evaluations to be given once an initial contact is made, details are provided, loan options are researched, and a plan for successful closing is in place. All part of the evaluation provided free of charge, whether you decide to move forward or not.

DUE DILIGENCE

While it has a variety of meanings in terms of real estate or other applications, essentially the due diligence is appropriate steps taken to ensure a legal requirement. Once it is determined that a deal has potential, the due diligence process must begin immediately. The short-term steps are then taken to ensure that a property in question is valued at an appropriate price.

The as-is property value price is important in determining the amount of a loan available and directly displays the market value of a piece of real estate in terms of its current condition. Without taking into consideration any remodeling, the as-is property value allows for the process to move forward.

CREDITWORTHINESS

After determining the as-is value of the property in question, a lender must determine the creditworthiness of a borrower. This process is also quickly executed in an effort to minimize the time it takes from initial contact to brining a final deal to close and allowing borrowers a quick turnaround for their potential investment or commercial use properties.

Once debt obligations and credit score is determined, if the borrower meets all expectations then a term sheet will be issued for the deal.

TERM SHEET

A term sheet is one of the most critical aspects of the lending process as it serves the purpose of spelling out all of the ins and outs associated within a particular deal. Often the term sheet issuance begins the actual lending process even though multiple steps have been completed prior to reaching issuance.

All steps and funding details are included within the term sheet and underwriting begins. While most lenders rely on outside institutions to complete the underwriting process, which can add length of varying times to the lending process, once a term sheet is issued here, the deal will be completed as the company handles all of the underwriting measures currently in place.

Not only does this speed up the lending process considerably but also takes out any questioning of if a deal will be completed once all of the necessary paperwork is contributed. Prior measures will often rule out any potential defunt deals before reaching the step of term sheet issuance.

CLOSING

Finally, after making contact and following each of the previously detailed factors a deal for lending the necessary funds will be brought to closing. Much like the closings involved in personal real estate, a business transactions features both parties signing all of the required paperwork as the process concludes.

However, instead of this process taking multiple weeks or months, often a hard money lender can bring deals to close in a significantly shorter timeframe. This is especially important when either facing a deadline or if the borrower is involved in multiple deals and needs a potential monetary gain from an investment opportunity to proceed with another real estate purchase - i.e. flipping properties.

If you find yourself in any of these scenarios, are in the stage of researching potential hard money lenders, or are ready to move forward with a contact then come see the experts at COHI Capital Private Equity Lending who can help you determine and analyze your individual needs. After their free consultation, quality experts can offer meaningful advice and help to set up a beneficial plan immediately for all involved parties in order to achieve the goals of everyone involved in the process. They will decide what type of loan will work best for you drawing on experience and benefits of finding successful funding needs for over a decade. A full detailed review of your situation can be completed in addition to resolution issues and monetary considerations. Request some additional information by contacting COHI today. Call 970-922-3277 or contact us for a decision. Often these are made the same day and can be addressed depending on client needs and schedule.