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A hard money loan is also known as a bridge loan – you should repay it in a short period of time. However, a customer may face some issues – for example, a loan matures before he is able to repay it. If you have ever had a similar situation, you might ask yourself, “is it better to extend or refinance my loan.” Well, let’s consider both situations when it’s better to extend a loan and when it’s better to refinance. What are the benefits of extending a hard money loan? The main advantage of loan extending is a quick approval process. In addition, you already have a trustworthy relationship with your lender, so at least you don’t need to look for a new one and do complete underwriting. What are the pitfalls of extending a hard money loan? The first and the most important pitfall is that you can […]

There is no doubt that getting a loan from a private lender is a much easier process than getting a loan from a bank. However, in the list of necessary documents, you will find an “insurance” paragraph. So, what kind of insurance do you need to get a hard money loan from a private lender? Simply, you will need two types of insurance – title insurance and hazard insurance. What is title insurance? In the first place, this type of insurance is needed for you to avoid the conflict that may arise in the future on the property’s title you are going to buy. This insurance is also required by a private lender. What is hazard insurance? The second type is hazard insurance. In most cases, people invest all of their life savings into the house. Subsequently, they need to be ensured it’s insured. So, you will have to provide […]

Recently our president Boris Dorfman showed me an article, “Couples can fight inflation with 7.12% risk-free interest to increase their holdings”. According to the article, I bonds have relatively low purchase limits, and couples may leverage a year-end strategy to increase their holdings. I bonds, backed by the U.S. government, won’t lose value, and there are two parts to returns: a fixed and variable rate, which adjusts every six months based on the Consumer Price Index. Sounds great, doesn’t it? “Right now, long-term Treasuries, certificates of deposit, and savings accounts are earning essentially zero,” said Christopher Flis, CFP and founder of Resilient Asset Management in Memphis, Tennessee. “But the [I bond] inflation adjustment is where you will make a little bit of bang for your buck,” he said. However, with LBC Capital, you got 8% on your savings, secured by real estate! LBC Capital is a top Californian private money […]

House flipping can become a great source of income. However, it’s not that easy. Most beginners fail at their first project and decide not to move forward. So, what are the most common mistakes when flipping a house and how to avoid them? First and foremost, beginners spend too much on the house. For example, the ARV (after-repair-value) is $500,000, and the renovations are estimated at $30,000, so the house price should not be higher than $479,000. It’s called the 70% rule. That means you cannot spend more than 70% of the ARV price on the purchase. Repairs miscalculating is a second pitfall. Estimating the renovation cost is as important as the purchase by itself. Therefore, make sure you have a reliable contractor. Taking on a too big project is another issue that can lead to failure. When you are a beginner, it’s crucial to estimate your possibilities correctly. Start […]

It’s quite a question for a borrower what lender to choose when there are a hard money lender and a private lender. What is the difference between them? Which one is better? Although there are differences between them, they are similar in some aspects of their operations. Therefore, it’s essential to understand all the nuances to quickly find out what lender is the best for finance deals. Who is a Hard Money Lender? Hard money lenders are private lending institutions offering loans secured with real estate. These lenders can close the loans faster than a bank, but their interest rates are higher than those provided by banking institutions because of the higher risk and shorter loan terms. Who is a Private Money Lender? Private money lenders are almost the same as hard money lenders, but with one difference — private money lenders have their own funds and do not depend […]

What are fix and flip loans? Flipping a property usually means buying a building for renovations purposes and selling it to get some profit. In most cases, this method is used for homes, but it’s suitable for all types of properties. Fix & flip loan is short-term, implies high interests but cover the cost of purchase and renovation. Also, with this type of loan, it’s possible to buy “fixer-upper” properties called distressed properties. Experienced flippers usually buy a run-down house in a good neighborhood, make aesthetic improvements and then sell it at a premium price and, of course, make a good profit. In most cases, hard money lenders are ready to cover up to 70% of costs. However, with LBC Capital, you can get up to 85% and fast deal closing. Types of fix and flip loans Professional real estate investors may have access to immediate financing that they use […]

Getting a loan from a hard money lender is much easier and faster than getting it from the bank. However, before being approved for a hard money loan, private lenders require you to provide plenty of documents to see if you qualify. Proof of funds letter is a standard document that money lenders request in California. So, what is that, and how to get it? What is a proof of funds letter in real estate? Proof of funds letter is an official document that confirms you have sufficient funds to close a deal – to repay the loan. If you are a homebuyer, this statement is a confirmation you can make a down payment and pay closing costs. Still, big purchases or other financial transactions require big money, and that’s where the proof of funds letter (also known as the POF letter) comes in handy. Proof of funds letter is […]