The concept of hard money has a lot of implications. In the current market, dominated by "financial" as opposed to "real" values, your worthiness as a debtor is decided by your ability to repay the loan, rather than the value of the asset associated with the loan itself. When searching for a hard money loan, however, you are looking for money that is not guaranteed or backed by a government. Rather, you are looking for a loan based to a great extent on the value of the asset that is placed in collateral, and the market skills of the transaction participants.

The valuation of the asset is an important aspect of any loan to be made. A hard money lender, because he isn't given any recourse other than foreclosure, will loan a low enough percentage of the value of the asset so that the costs of foreclosure, and the subsequent sale of the property, will not hamper his recovery of his money. In other words, the lender needs assurance:

• The property should be in good condition, have an un-clouded title, and be in sufficient demand that it will sell in a short period of time.
• Or conversely, the lender has to be certain that the property, if not sold, will be valuable to him as his own asset if he chooses not to sell it.
• Or, perhaps the most important contingency: the property, if not in good condition, must have potential to become valuable in the hands of the borrower.

Hard money has an implication of strict guidelines, without the buffer of government shields to soften the blow, or to guarantee the loan. Hard money also has a requirement of financial capacity on the part of the lender. A hard money lender has to have sufficient assets so that the money can be forwarded from the lender's funds or trust deed investor funds. A hard money lender has to have sufficient experience in the marketplace to accurately appraise property, market property, and establish credibility in the case of several different contingencies.

The key skill that a hard money lender has to have, however, is being able to evaluate the borrower. Any skills that the lender has must be mirrored in the borrower if he is to be successful in hard money transactions. The success of the venture is not indicated by recovery of the money through foreclosure. A successful hard money lender will demonstrate the ability to broker successful ventures for the benefit of the borrower.

Contact us to continue the dialogue regarding exceptional opportunities that are available in the realm of hard money.