Analysis of Genuine and Fake Money Lenders by Private Money Loans Arizona

Welcome to Real Estate Investing Today brought to you by Arizona Private Money Loans. My name is Ryan Wright and thank you for joining me. Today I want to talk to you about what is a true hard money lender with all the changes in economy with all the changes with lenders lenders going out of business, government bail outs and so on. The role of the lender has changed and government intervention has changed lenders. So all kind of crazy things are happening out there.

In doing that private money lenders have changed as well. There are so many private money lenders that are now soft money lenders. They actually are underwriting the files based upon all kinds of criteria like credit scores, income ratios, job history, tax returns, employment verifications, and bank statements and so on. I want to talk to you today about what I consider a private money lender versus a soft money lender or traditional lender.

The difference is; a private money lender is looking at the value of the collateral. They are asset based lenders meaning their lending is based upon the value of the asset, in our case real estate. So private money lender simply looks at the property and that is what they use to determine if they will lend money or not. Every one else I consider soft lenders because they are looking towards the borrower and they want to know about the borrower’s information. They want to know if the borrowers have lates in their credit. They want to know if the borrower has a job and if the borrower has enough money or has enough reserves and six months worth of payments in the bank or whatever the case is.

We simply look at the value of the property and anything that can affect collateral. So the only thing that Private Money Loans is going to care about, when it comes to if a funding is going to happen or not with regards to a borrower or if the borrower has judgments. Judgments are actually going to attach to the property when you purchase it. So judgments are going to have a major effect and properties won’t get funding if the borrower has a judgment.

But other than that credit scores, tax verifications, income documentation, bank statements, six months of reserves or any thing about the individual does not have to be analyzed and we won’t rely on these factors before sanctioning a private money loan. The only thing we are looking for is the asset, how much value is in the asset and if there is asset value then Hard Money Loans is more than happy to provide financing irrespective of the credit scores or history or job. So, true private money lenders are looking to evaluate property not looking upon the borrower to make a determination if the loan is funded or not.