Qualifying Hard Money Lenders

By Will Heaton


When you apply for a loan with a hard money company you will undoubtedly be asked for several things including the purchase and sale agreement, pictures of the property, a credit report, your investment history, scope of work and exit strategy for the property. But what questions will you be asking the hard money lender about their services, underwriting guidelines, timelines or loan terms? Anyone that has been to a REAPS meeting probably knows that there are a couple reputable, local companies that offer fast, short-term lending. Have you interviewed different hard money lenders or spoken with other experienced investors at local real estate investment meetings, like REAPS, to see what their experience has been and if they have any recommendations? While other trusted investors are going to be a great source for info it is always nice to hear directly from the lender.

Any hard money lender that you choose to interview should be able to answer any of the questions below, without hesitation to your satisfaction. And below these questions you will see answers from the staff at Intrust Funding.

  1. What type of loan programs do you have that would be a good fit for this project? Intrust Funding has a Standard loan where you pay for the rehab out of pocket and a Construction Loan where we fund the purchase price and rehab, terms are dependent on the length and scope of the project.
  2. What does your construction draw process look like? After your property closes you are eligible for your first draw the next day, no inspections required, no hassles, complete a predetermined portion of the work, send us 15 pictures and you're eligible for you next draw and we can wire that to your account, mail it or pick up at our office.
  3. When will you have an answer on whether or not you can fund this loan? Our underwriter will typically have an answer within one business day, which then needs final approval from the management group.
  4. Who is the deciding person as to whether or not this loan is going to be funded? Our underwriter is very accessible, will give you his honest opinion on the deal and has a very high percentage of loans he approves getting approval from ownership, ultimately ownership makes the call.
  5. What is the soonest that we will be able to close on the property? Typically, within 5 business days of loan origination date if everything goes smoothly.
  6. What are you underwriting guidelines? How much consideration do you give to the property rather than my personal investment history, and credit score? The potential value of the property is given far more weight than the borrower or their investment history.
  7. Do you count assignment fees as part of the loan basis that may be added into the purchase price? Of course, an assignment fee is similar to a commission and so we lend on the total purchase price, assignment fees included.
  8. Can you provide me with a good faith estimate of what my loan looks like and compare this to other loans? Yes, we can always do compare your loan against our different loan programs and if you have other terms from a competing lending firm we would be happy to compare so you can make an educated decision
Are you seeking a loan for an investment property? Contact Carolyn Gossett at [email protected] or 425.999.5203 to inquire about our loan programs. If you haven't been to our Investor 101 Class, please join us every other Monday to meet our team and learn about the investment process. Visit our website for more information.


About the author...

Will Heaton is a co-founder and managing partner at Intrust Funding. As the fund manager, he is responsible for investor relations, underwriting, and new business development. Will has over 10 years of experience in multifamily and residential real estate. Drawing on his comprehensive knowledge of renovation financing and construction management, Will uses a value-add approach to complete his multifamily and residential real estate projects. He regularly gives educational lectures to real estate investors and has been quoted on numerous occasions in well-respected publications. Will has been recognized by the Master Builders Association and Built Green for his work with LimeLite Development and Infinity Land Management He is an enthusiastic member of the community and enjoys participating in various non-profit groups throughout King County. In his free time, Will enjoys adventures with his wife and their two children, classic cars, and fishing.

REAPS is the oldest – and largest - Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you've never attended one of our meetings, just email our office at [email protected] and be our guest for free!"

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