At this time, we provide hard money loans almost exclusively on non-owner-occupied residential properties. In some cases we will provide hard money loans on small commercial buildings. We typically will not lend on condos, townhomes or attached homes unless all units of the structure are included (i.e. both sides of a duplex, but not half a duplex). Our primary focus is the Denver metro area and we will also lend in Boulder and Colorado Springs. If we have experience with you, we may consider other areas in Colorado and other types of properties as well.
We do not require you to use a certain title company or hazard insurance company, as long as the corresponding requirements for hazard and title insurance are met. Here are some companies our people have worked with successfully in the past; however, we make no representations or warranties about these companies. You should select the vendor that best meets your needs (provided they meet the requirements set forth in the loan requirements and documents).
We are a private hard money lender. We do not use an appraiser. Instead, we review your proposed projects. We compare your proposed finished product with similar properties sold. Typically local sales in the last 6-12 months are considered. Then we may make adjustments for properties currently for sale. We try to estimate a price likely to produce a sale within 30-45 days. One benefit of using a local private Colorado hard money lender is that we not use appraisers. That can save you money. Also, we are free to consider relevant information from borrowers. If a recent appraisal is already available we will look at it.
Why are your rates lower than the typical 3 to 4 points (i.e. 3-4% origination) and 14-15% interest?
We work hard to keep our costs down so we can provide very competitive rates. We also try to minimize unnecessary costs for our borrowers (e.g. single family properties do not require an appraisal).
- We use one source for funds, so we are the final decision makers and do not need to consult with or comply with anyone else in making our lending decisions, restrictions and rules. We don’t have to compete for additional money sources that may require higher rates.
- We work to keep our overhead low.
- We underwrite in-house and don’t need to spend resources communicating back and forth with other parties.
- For rehab/ fix and flip loans we look at borrowers’ experience and qualifications to lower risks and costs to all parties.
If you (your family or your employees) are living in the property (single family residence or a 2-4 unit residential property) or the loan is for personal, family or household use, the loan is classified differently by federal and state law and we would not be allowed to offer these loans or would have additional process and administrative requirements. Therefore the restriction that you, your family and employees may not occupy, reside in, or live at the property is strict and is expressly prohibited in our loan agreements. Additionally we like lending for investment purposes only and do not want to be put in the position of ever having to potentially foreclose on someone’s home.
Yes, if we pre-approve the loan after reviewing a free pre-approval application (remember a pre-approval is not a loan commitment).
We can work with borrowers to utilize a “soft pull” credit history service such as CreditKarma.com (and avoid hard credit checks).
It is important to us to know if potential borrowers are in currently in financial trouble. We are a hard money lender, so our loan decisions are primarily based on the underlying value of the property (“hard asset”); However, even as hard money lenders, we do consider recent credit related behavior among other factors. We will typically review credit history for each human borrower. We are not looking for a minimum credit score, but will evaluate recent credit history focusing primarily on the following aspects:
- Related recent bankruptcies
- Related recent foreclosure proceedings
- Recent history of late payments
- Currently owed payments that are past due
We look at the each loan as a whole package including the asset, the borrowers and the market.
(Good Funds Lending, LLC provides hard money loans in the Colorado Denver Metro area)
For the pre-approval application, we will perform a cursory evaluation of your financial estimates for the project (purchase/acquisition cost, rehab budget, after repair value), and your level of experience and your answers to few other questions. If we believe there is a reasonable likelihood that we would make a loan based on the information provided, we will inform you that you are pre-approved. If approved, and you request a pre-approval letter (Often pre-approval letters are submitted with offers on properties; however, some borrowers may choose to complete a pre-approval application after the property is under contract). A pre-approval is not a guarantee that the loan will be approved or made.
For the full application you provide more details regarding the project and your experience. We more carefully review the borrowers and project. We evaluate the current and after repair value of the property and closely review the expected repair/rehab costs. We examine credit history (via a “soft pull” working with the potential borrowers using a service like CreditKarma.com or a “hard credit check”) of all human borrowers. We do not look for a minimum credit score, but primarily focus on your credit activities/events in the last two years. Prior to making a decision on a loan commitment we typically do a property walk through with one of the borrowers.
At some point prior to a loan commitment we need to meet all human borrowers on the loan and take a picture of each driver license (or State ID) and do a property walk through.