Do legitimate businesses use hard money loans?
Yes. Hard Money loans are not just for first time or smaller scale Investors. Many “legitimate” and small to medium sized businesses rely on Streamline Funding’s hard money lending program to responsibly meet their funding needs and to capture opportunities that require quicker funding than is available through traditional lenders.
Why do Hard Money lenders exist?
Hard Money lenders exist because many real estate investors need quick responses and quick funding to secure a deal. Banks and other institutional lenders that typically offer the lowest interest rates do not provide the same speed and transparency in their decision making and funding process. Investors normally use Streamline Funding in cases when they are either unable, unwilling or do not have the time to obtain financing from more conventional sources.
What are your terms?
Streamline Funding currently has four different loan programs to help Investors with a multitude of projects ranging from fix & flips deals to longer term hold deals. While we suggest that you look at our Loan Programs page for more information on our terms, generally speaking, our terms are going to fall into these parameters:
a. Loan amount from $50,000 to $1,000,000
b. Interest Rates from 11.99 to 13.99%
c. Points from 2% to 5%
d. Loan Terms from 6-18 Months
e. 2 Month Prepayment Penalty
What are some of the advantages of hard money loans?
Some of the advantages of borrowing hard money are:
a. A much less complex application process is required for the lender to make a final loan decision.
b. Less scrutiny of the Investor’s personal financial situation, including income, tax returns, assets and liquid reserves, as compared to bank loans.
c. Streamline Funding does not expect perfect credit and/ or substantial amounts of disposable income from its clients, instead we focus on the merits of the specific deal under consideration.
Where do you lend?
Streamline Funding lends through out the four major metropolitan areas in the state of Texas, specifically Austin, San Antonio, Houston and Dallas/ Fort Worth. Other secondary markets (i.e. Waco, San Marcos, Galveston, etc.) will be considered on a case by case basis.
Can I live in the house during the course of the loan?
No. Streamline Funding will not consider any owner occupied loans. Streamline Funding’s hard money lending program was created exclusively to finance non-owner occupied investor properties.
How does Streamline Funding decide how much to lend?
Streamline Funding makes its lending decisions based heavily on the project’s Loan to Value (LTV) ratio. In addition to the LTV, the Loan to Cost (LTC) ratio is considered. These ratios measure the risk of the loan by comparing the loan amount to the cost of the project and the value of the asset, respectively. Streamline Funding has incorporated an “ARV” approach to valuing its real estate project, “ARV” stands for “After Repair Value.” In many cases, Streamline Funding can fund as much as 70% of the ARV of a property so long as all of the other criteria is met to allow for such a loan approval.
When does it make sense for someone to use a hard money loan?
Having funded private loan opportunities since 2001, we have seen several different reasons for an investor to consider and use a hard money loan. In our experience, even those investors with strong financial statements and access to traditional financing choose to use hard money. Some specific reasons are those where the Investor seeking to borrow funds:
a. Requires a quick closing and his bank can not make the deadline.
b. Has an excellent investment opportunity but does not have sufficient financial strength to get a bank loan
c. Needs more leverage than a bank is willing to give
How do I get Pre-Qualified for a Hard Money loan?
The best answer is generally, “Contact your Streamline Funding Lending Officer to get pre-qualified,” however, we realize that sometimes it is easier and more convenient to do this online so, to get pre-qualified, simply go to our “Apply for a Loan” page and fill in the information. Let us know your preferred method of communication and, should your loan qualify, we can connect with you to discuss the proposed terms and send you a “Letter of Intent.”
What is a Hard Money loan?
Hard Money is the term used for loans funded by private parties that cannot or will not be funded by conventional lending institutions. There are many types of hard money loans other common industry terms used in lieu of “hard money” are: private, asset-based, bridge, rehab, interim, etc. Generally, Streamline Funding focuses on providing profitable lending solutions to its Real Estate Investor clients that purchase residential real estate investment properties at substantial discounts and/or properties with large “value-add” or “upside” opportunity.
What are some disadvantages of borrowing hard money?
a. Hard Money loans are more expensive than conventional bank financing with higher interest rates and origination fees.
b. The quality of active lenders varies substantially and, in certain cases, some lenders may be seeking to write loans where the risk of default is considerably higher in order to foreclose on the underlying real estate as their business model. At Streamline Funding we constantly seek the repeat business of our clients and only approve those deals that we believe are financially feasible.
Do you provide a “Letter of Credit?”
Yes. Once you have applied and qualified for a loan with Streamline Funding a Letter of Credit or “Letter of Intent” will be prepared should you require it for a particular transaction. This letter is not a commitment to lend nor is it a “Proof of Funds” letter, instead it is a letter that can be presented to a Seller during the contract negotiation period that shows our intent to lend you an amount typically equal to or greater than the purchase price.
How long does it take to close a loan?
Aside from “What are your terms?,” this question is one of the most commonly asked questions that we are asked. The answer to this question is 7-10 days, however, it must be noted that, in order to achieve this we do require the Investor’s complete cooperation in submitting a clean and complete loan package. The speed of the transaction in very dependent on the Investor’s response times.
How do Hard Money Lenders differ from one another?
Hard Money Lenders differ from one another in many ways, including their lending criteria such as the loan to value or loan to cost ratios, the type of real estate on which they lend, minimum and maximum loan sizes and the geographic regions which they service. If an investor wants to compare hard money lender to another from an “apples to apples” standpoint they can consider things such as pricing (fee’s and interest rates), flexibility of terms in case of unforeseen events, their reputation and the quality of service. Approx. 75% of the investors that Streamline Funding has financed a project for have returned for a second (or third, fourth…) loan.
What is Streamline Funding looking for when considering my application?
First and foremost, Streamline Funding looks to make sure that your transition is a positive one. If a deal is too “skinny” and it looks like it may fail, we will pass on the opportunity. Secondly, we look at the property’s ability to repay the debt and finally we look at the investor’s ability to service the debt as well as their credentials (experience) for a project such as the one that he/she is applying for.
At the time of application and prior to closing what documents will you require from me?
On every deal we will require a loan application, Entity documents, a Copy of the Contract (for Purchases) or HUD-1 (for Refinances), Bio or Resume for the Investor, Appraisal, Survey, Hazard or Builder’s Risk Insurance, Title Commitment (& other pertinent title docs) and in certain cases where an entity is used to take title to the real estate entity docs will be required.
Are your rates & points flexible?
We love to reward our best customers so we have developed a platinum investor program for those clients who have successfully completed a handful of projects with us. Our rates and points, however, remain fixed therefore are not flexible. The perks provided to our clients in the platinum investor program outweigh the savings that would come from lower rates & points. Once you have qualified as a Platinum Investor you will be privy to perks such as Free Extensions on Loan Terms, No Prepayment Penalties, No Appraisal Fees, Concierge Draw Service, (in certain circumstances) no cash-in.
We closed our first loan together… now what?
After a loan has closed your file will be transferred to our parent company, Noble Capital Servicing, LLC, for the loan servicing and (assuming your project has a construction component as more than 80% of our loans do) you will work with them on your future construction draws. This is a fairly easy transition but can be overwhelming to those who have not used our forms in the past as they are unique to Streamline Funding and Noble Capital. At the time of the transition you will be greeted by somebody on Noble Capital’s servicing or construction controls team to walk you through the process and give you tips on how to better execute your project while still complying with our processes. For a little more information about the post closing and draw process, refer to the “Construction Loan Disclosures form provided to you by your Lending Officer at the time of the initial application.
What Is Streamline Funding's Philosophy on Business?
The Hard Money Lending ‘Win-Win’ Philosophy of Streamline Funding
In this video, Streamline Funding’s Vice President of Lending, Romney Navarro, discusses his philosophy on lending hard money to real estate investors and how his company differs from other lenders in the real estate industry.
How Do You Get A Real Estate Hard Money Loan Through Streamline Funding?
How To Get a Hard Money Loan
In this video below, Streamline Funding VP of Lending Romney Navarro details how to get a hard money loan through Streamline Funding.
How Long Does It Take To Get A Loan From Streamline Funding?
At Streamline Funding, our goal is to help real estate investors and fix & flippers obtain funding fast. We typically can close within 7-14 days. The speed of funding can be the difference between an investor closing on a deal or missing it altogether.
We at Streamline Funding take pride in the fact that since 2001, we’ve helped hundreds of Texas real estate investors successfully fund real estate transactions.
Click the video below to hear from Romney Navarro, VP of Lending at Streamline Funding: