The process to apply for a loan in the commercial real estate industry can be confusing, even on the best of days. Lenders are often not helpful, simply because they do not have the time. They want to move on to a loan that is going to bring them a larger paycheck. Here are some of the things that they don’t want you to know about commercial hard money lenders.
In the minds of many, hard money lenders are the loan sharks of the commercial real estate industry. And they do little to dissuade this opinion. It makes sense. If coming to them makes a borrower feel like they are begging, or asking a favor, then they are the ones who can dictate the terms of the loan, even if it is a forgone conclusion that a borrower is going to be accepted by a commercial hard money lender.
But how can you, as the borrower, can outmaneuver them to make the situation work more in your favor? Well here are a couple of tactics that you might want to try when moving forward with a hard money lender. Obviously there is no guarantee that this will bring you lower rates and better terms, but it is worth a shot, isn’t it?
The first thing to realize is that not all commercial hard money lenders are sharks. Many of them are professionals who are simply trying to feed their family. However, all of them benefit from the stereotype of being difficult to deal with. What you must realize as a borrower is that a commercial lenders most valuable asset is time. If you are wasting it, you will get nowhere with them. The thing that you need to establish immediately is that your loan is going to be worth their time.
The second thing that you must realize about commercial hard money lenders is that they don’t expect anything from you. They will not be disappointed if you are disorganized, they just won’t work with you. They won’t complain and they won’t make demands, they will simply look elsewhere for their paycheck. So the best thing that you can do is to be organized, be on time, think things through and anticipate their needs. If you were a lender, what would you like to know?
Finally, you must understand that they actually want you to succeed. If you are a successful loan for them, not only do you get the funding that you desire, but they also get a nice commission. They are not your enemy, they simply want to make sure that you are worth their time.
So how do I get commercial hard money lenders to work with me?
As a potential borrower, the best possible thing that you can do is to take away all of the excuses to not work with you. Don’t be a waste of their time, be prepared with your documentation and be actively involved. The less time that they have to spend attending to your needs, the more time they can spend pursuing other loans and the happier they will be. Commercial hard money lenders want you to be an asset to them, not a burden. Anything you can do to reinforce this idea is only going to increase your chances of success.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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