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Real estate provides a wealth of different investment opportunities. Hard money lending is one of many approaches an investor can use. Hard money lenders place as strong of value on real estate as most real estate professionals do. If you are a prospective investor, you should have a solid understanding of the market as well as the value of the property following a brief inspection.

When it comes to hard money loan contracts, it is typically written to benefit the lender as much as the investor/borrower, but there are general rules that propel the hard money market. Hard money lenders don’t utilize the standard underwriting process used by banks which focus heavily on credit history and income.

Hard money lenders concentrate on the property value versus the borrower’s creditworthiness. While a professional appraisal is a factor, it’s not the only valuation tool evaluated by the lender. It’s not uncommon for them to request two or even three valuation models to make their decision. Hard money lenders may examine tax assessment records but it’s not the only way to evaluate value. A broker price opinion (BPO) is another tool hard money lenders may use to value property. A BPO is a broker’s assessment of the property value.

The value a hard money lender places on a property is not associated with the negotiated purchase price. It will be based on what the property value is based on the market. A lender will take into account scenarios such as if it can recover the money loaned if the market bottoms out or if it will earn a profit even if the loan ends up defaulting.

This update is by hard money lenders Miami company Monroe Funding Corporation, a direct equity lender serving clients throughout Central and South Florida. We specialize in first mortgages on non-owner occupied residential and commercial property investments as well as real estate loan options. Our fast and flexible loan programs get you to the closing table quickly and professionally. For more information on hard money loans FL or hard money lending Florida, please call 954-816-0388 or fill out our application.

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