There are hard money lenders in Maryland that can offer rehabbers a quick resource for funding
More and more real estate investors are turning to hard money lenders in Maryland, Virginia, DC and other areas of the country. Buying, repairing and reselling can be very profitable. There are many motivated sellers out there. It is truly a “buyers” market, in most of the country. If you tie up all your capital in a single deal, you are likely to miss out on big opportunities.
Securing your cash flow is a good reason to turn to a Maryland hard money lender. We’ve all heard of buying a property “no money down,” but few people understand how it’s done. The deal has to be right. You must be able to find the right house at the right price. You need to be able to calculate the necessary repairs. The post-repair value should be a bit higher than the purchase price, but if everything “fits,” then a private lender can provide the funds for the purchase and rehab, sometimes even incorporating closing costs. So you made a purchase and spent little or none of your own cash.
Once you’ve finished the repairs and resold the property, you pay hard money lenders in Maryland or wherever you are, and move on to your next project. You can even keep multiple projects running at the same time. The best groups (those that specialize in rehab financing) will help you finance as many projects as you like. As long as the loan-to-value and purchase price-to-value ratio after repair is good.
There are certain things to keep in mind when choosing a Maryland hard money lender. While some operate only in that specific region or the DC metro area, there are other lenders that are located throughout the country. They are still considered private or non-standard financial providers, but for some of us it is good to know that the company is quite large and has a lot of financial banking. Smaller groups and individuals are more likely to end up with their own financial problems and things like that can affect the borrower.
Not all hard money lenders in Maryland offer the option of combining the purchase price with repair costs. It’s a good idea to find one that does. You should also compare the fees and penalties for early repayment. Some groups charge 3% of the original loan for early repayment. You want to look for a group that does not charge you a penalty for early repayment. They should be happy to see their money coming back quickly.
In some states, there are laws that regulate the amount a business can charge a consumer to pay off a loan early, but a Maryland hard money lender is not regulated in that way. Rehabilitators have to look out for their own interests, in that sense. In states like Connecticut, 3% is the maximum fee that can be charged. There is no limit in Maryland.
Just as you take the time to search for the right home repair in Baltimore or Upper Marlboro, you should take the time to search for the right hard money lenders in Maryland.
All things considered, they are probably your best option for financing the purchase and repairs. You just want to make sure you find the right group.