Hard money loans are typically needed quickly, whether it’s to bridge a financing gap or take down a bargain property. Having the proper information for your hard money request can put your lender at ease while allowing a decision to be made quickly when it can do the most good. Here is a basic checklist of required information for most hard money loans, broken down into five categories: security (collateral), location, exit plan, records, and application.

Security

• Define the property that will serve as collateral for the loan (e.g., how the property is classified/zoned, and what its value is) with as much detail as possible.
• Know how the property value has been determined (appraisal, broker’s opinion, etc.).
• Consult a title company to find out if there are any liens against the property and who holds the title for it.

Location

• Choose a property in a safe neighborhood. High-crime neighborhoods are a red flag with lenders, and it will take longer to obtain funding for the purchase, if it gets approved at all.
• Provide photographs of the property, any special features or buildings, and the surrounding properties/neighborhood.
• Find comparable sales for similar properties in the same neighborhood to support your valuation.

Plan

• Show exactly how the funds you’re requesting will be used. If you’re asking for additional funds for repairs or improvements, then you should provide bids and cost estimates from contractors for these renovations.
• Know how the property will be used and have an exit strategy to repay the loan before you go in (e.g., refinance or resell).

Records

• Even though credit is not the main basis for a private lender’s decision, you will still be expected to provide financial records (for yourself as well as the property if it is income-producing), proof of income, credit reports, and other documents.
• The documentation requirements will vary from lender to lender, so you should check with yours as soon as you submit the loan request (or before) to find out what information they will expect you to provide.

Application

• The final piece of the puzzle is the lender’s loan application form. Make sure to fill this out completely and submit it with the other information in this checklist.
• Once you’ve submitted your application, make sure to respond promptly to any additional requests from your lender. It will help to reassure them that you are a responsible individual to whom they want to loan money.

Getting approved for a hard money loan requires more than just a purchase price and a property value. By providing the above information to your hard money lender at the get-go, you can speed up the approval process as well as improving your chance of loan approval.