Securing a Hard Money Real Estate Loan in the COVID-19 Environment

Securing a Hard Money Real Estate Loan in the COVID-19 Environment

So you have a real estate goal or dream. Fixing and Flipping homes or securing investment properties can offer financial freedom. That is why we love what we do at We are changing lives one property at a time!  

Now the question is, how are you going to manifest your goal? Think of your hard money lender as your partner. Their goal is to make sure that you have the highest likelihood of success. They are putting their hard earned money on the line to help you reach the finishing line on budget and on time.

Your hard money lender is an extra pair of eyes. The litmus test to the soundness of your project and your ability to execute and make it profitable for both of you and them.

Lenders are weighing their exposure in the COVID-19 environment. Now there are higher hoops to jump through as a borrower. Especially a borrower with no or a more limited track record. Lenders are being more cautious. We are seeing many property values come down across the board. In an environment where many people can’t pay rent and many borrowers temporary not making mortgage payment, lenders are scrutinizing deals more carefully. The lender doesn’t want to get stuck with your property in their portfolio if you are unable to execute your business plan. With that in mind, lenders are lowering their loan to value ratios. Of course every borrower is unique, and every lender has their own lending criteria that they are adjusting in these uncertain times.

They want to understand your road map, the trends in the neighborhood, as well as comparable sales in the last 12 months etc.

The COVID -19 environment will create incredible opportunities for those that can see the values and create the plan. If it is a fix and flip project the lender will also want to know more about your and your team’s experience, and if you need money to improve or repair property.

Your vision, enthusiasm and game plan and experience will determine how good of a deal you can negotiate with a lender. The lender will have to know and like the location of the property. Your credit score can play a roll in your interest rate and other terms you will receive, but unlike a conventional loan it may not be weighted as importantly.

When you enter your loan request on you will be matched with verified lenders that are qualified and eager to lend. Lenders on the platform will compete to lend on your real estate project. Make sure you are prepared with all your numbers and game plan. Also, have your comparable sold properties in the immediate area for the last 12 months. Showing a lender compatibles from properties over ten miles away won’t cut it. It’s best to try to stick to a one mile radius and sometimes closer depending on how dense the location of the property is. Ask yourself, if you were a lender would you bet on you? If yes, then write the reasons down why your project makes sense. Be prepared to discuss the finer points of your deal.

Your hard money lender is a valuable resource that can also help you on subsequent deals you may find. Developing an honest, open and straightforward relationship will serve you well. 

We have culled a list of the finest lenders in the country. If lenders pass on your deal, then you have to ask yourself if you had a viable deal to begin with. Remember, hard money is smart money looking for a home. Show them why your real estate project is a smart place for them to deploy their capital.

Looking forward to seeing you realize your real estate dreams!

Related Post

How to effectively use the Rule of 70% in House Flipping!

Whether you are a new or seasoned real estate investor flipper, calculating how much you should offer on a property is one of the most important factors to consider.