06 Mar Exactly what is a Private Hard Cash Loan, and why would I want one?

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A private / hard money loan is a short-term home loan generally used for investment properties. We can fund the purchase and/or remodeling of a home. Hard money loans can be acquired quicker than traditional home loans and the qualifications are more versatile, too. A hard money loan is a tool often utilized by both fix-and-flip financiers and financiers planning to construct a rental portfolio.

Who Needs Hard Money

Real estate investors, home flippers, amongst others, will use it to fund projects because you can frequently borrow much more than a bank will lend you on a per deal basis!  If you know you can purchase a home and turn it quickly at huge revenue, and you can’t get a traditional mortgage, it might be one way to go. Some financiers utilize hard money to get into the home, do some quick fixes to raise the properties worth, then get a new loan (based upon the home’s improved value) from a bank to pay off the hard money lender.

Hard / Private cash loans are quickly accessed and cut through the red tape. If you can establish a relationship with a good hard money lender, you can get funds within a week or two, with little money down, and many of your costs rolled into the loan.

Will I require an Appraisal?

Prior to a Hard Money lender provides you the funds for your job, the majority of will require an appraisal. An appraisal is a precise estimate of what a property is truly worth. It takes a licensed appraiser to assess a house and estimate the real value of a home and what repair work are had to the home. By having the home appraised, the lending institution will know precisely what the value of the home is and therefore will know exactly what they are willing to provide to you. Hard money lenders have to understand the specifics of the Home due to the fact that they wish to make a return on their cash too.

That is why they are lending you the money quickly for a home flip due to the fact that they know that you will earn a profit and in return they will make a profit by giving you the money you need in the form of a loan quicker than any other kind of loan.

What are the costs connected with a Hard Cash Loan?

Rate of interest for hard money loans typically vary from 12%– 14% and the points on the loan usually range from 2-4. But once again, all lenders are various. Some hard money lenders will add points after a particular quantity of time, and some hard money lenders will include a point at the origination of the loan. Hard Cash loans likewise generally have costs. Fees associated with underwriting, reward charges, inspection costs, and other costs.

Normally the terms for a hard money loan is between 6 – 12 months. If you exceed this term, there are typically renewal charges and points to pay. When rehabbing (repairing and repairing a residential or commercial property), you want to work quickly and pay the loan off as rapidly as possible. A lot of rehab tasks normally take about 3 months to 6 months to complete. This is typically adequate time to repay a hard money loan prior to it resetting costing you more money.  Typically, hard money loans are not utilized for long term loans.

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15 Dec Turn Your Real Estate Investing Into a Success Story

qInvesting in both residential and commercial real estate requires that you pay attention to your values and your costs; Start by not overpaying for property. Look at the property values yourself and make sure the value is what you expect. Then don’t overspend / over improve the property unless you are 100% sure you can get the money back at the resale. It is important that both of these factors are closely scrutinized to ensure the project will prove to be a good deal for you.

When you invest in real estate to rent the property, make sure you are able to get your money back within a reasonable amount of time, or you are ok not being able to get it out. Some people use longer term holds as a tax deferment tool, so if that is your goal you may be ok leaving money in the properties. Just remember that If it takes you many years to get the money back in rental payments, then it will be hard for you to use the money on anything property related.

Property values go up and down; don’t make the assumption that it will go up only. This is a bad assumption to make when dealing with real estate. Every deal should be looked at with multiple exit strategies so if you do happen to time the market wrong and find yourself in a downturn and unable to sell the property, you have a backup strategy to weather the storm. One back up strategy is to look at all of the deals as possible rentals if things go bad. Make sure the rents you would be able to collect offset the expenses / holding costs you will have to incur.

If you are not proficient in basic construction and all of the systems that go with a property, a good idea could be to hire a professional inspector to come out and see the property you're thinking of putting your money into. You may think that you can just look over the property on your own to find problems, but if you're not trained you may miss some things. When problems are found, you should make sure to get some money off of the property and or have the seller fix them for you. Good Luck and remember to call Summit Capital Management for your real estate funding needs!

You should have a handyman when you buy a real estate investment property. Otherwise, your extra cash will be depleted by high repair expenses. A good handyman can help make sure any tenant emergencies are taken care of after business hours. Build your real estate investment buyers list with online ads. For example, you could use social media, online ad sites such as CraigsList and/or the local newspaper to draw attention to the properties you have on offer. Be sure to retain contact information for every person who shows and interest so you will have a well-rounded contact list as you accrue new properties.

Hopefully, this article has helped you see that there is more to real estate investments than really meets the eye. It is important that you take baby steps when you finally set your eyes on a property and use what you have learned today. After all, the more you know, the better your chances of turning a profit.

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08 Sep Summit Capital is in the News

We are pleased to announce that Boston Voyager has written an article about Summit Capital!

It highlights how Chris and Mark started the company and goes into what they think the future holds for us.  You can read and exert below:

Today we’d like to introduce you to Christopher G. Gallo.

Mark and Chris were High School friends who lost touch during the college years but got reacquainted by a mutual friend who noticed that they both were doing similar projects in Real Estate Investment and Development. Mark and Chris met for a coffee and noticed that they had very similar goals, values, and business models and thought they should try doing a deal together. One 2 family in Brockton on Denton St turned into a 100+ building 400+ unit Real Estate Portfolio servicing the Boston South, South Shore, South Coast markets. They were constantly raising capital for their deals and using many sources of banks, private investors and private capital to do so. They realized that there was an underserviced Investor (them) that needed access to capital to fund real estate deals, and many times banks would either not be interested or move too slowly for these investors….Continue reading at

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25 Aug Do’s and Don’ts When Flipping a House

Summit Capital is a local New England hard/private money lender.  We will work with you to ensure you get the money you need for your investment as quickly and with aggressive terms.  Regardless of whether your project is a fix and flip of fix or a longer term hold. We are known for great service, fast turnaround times and very aggressive rates.

As a service to you, we offer this list of Do’s and Don’ts to help you move forward with your house flipping project.

The Top Do’s and Don’ts When flipping a house

We all know that flipping a house can have big rewards; but what about the risks involved? With this in mind, we have put together our list of do’s and don’ts when flipping a house. Wondering where to buy and how much to DIY?  The following tips should help

When the housing market was on the upswing in the late nineties and early 2000s, it was easy to make money people were making swift and big profits on their investments. Then the market crashed and everything changed.

It is important to use due diligence when making this kind of investment.

Do Hire a Trained Home-Stager

There are many real estate agents that are trained in the staging process.  Make sure you find someone who has the background to do this right. A home that is staged and furnished correctly will sell quickly, and that is what we want.

Don’t be afraid to “low ball”, well sometimes

If we don’t ask we will never know if the offer will be expected.  The seller may be insulted, but maybe they won’t and you can save thousands, just by asking.  Just be careful because in a “hot market” low balling will cost you the deal

Do know what you’re getting into

Make sure you find out what renovations the house needs before you buy. Sometimes the necessary improvements are so expensive that the deal just wouldn’t make financial sense. Bring a contractor with you when you tour possible flip properties to determine the extent and cost of needed repairs.

Don’t take on something you cannot handle

Know your experience level and don’t try to do a complete gut down to the studs on your first flip, Make sure you always consult with a professional before moving forward on homes with construction issues that you are not familiar with because things like; foundation, support beam, asbestos or mold issues could cost you dearly.

Do keep location in mind

We all know that location is key to selling a property, but how do we know when we are getting a good one? Try looking for dilapidated homes on nice or up and coming neighborhoods.  Flipping houses in these areas can only have an upside.  Also don’t over improve your house, unless you are 99.9% sure you can recoup the costs.

Don’t hold it too long

Keep in mind the golden rule of 180 days.  60-90 days for renovation and another 60-90 to sell.  You can’t make money by holding on to properties too long.  If you keep up a quick pace, you will be on the road to success, in no time.

Don’t get in over your head with DIY

Long hours spent on DIY remodeling projects — can lead to a bigger profit margin, but only if the work happens quickly and looks as good as a professional job.  If you are confident in your abilities then go for it, but make sure you know what you are doing before you get in too deep.

Do secure your financing ahead of time

Contact us today to get your financing secured before you find that ideal property.

If you have your money set up beforehand you can move quickly when you find the right property.  Winging it probably won’t yield the best results. There is nothing more frustrating than finding “the one” and not having the cash to move forward on it.

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